A World On the Precipice: The Last Oil Tanker From the Strait of Hormuz has Arrived – Now What? with Art Berman

We've got something like 11 and a half million barrels of oil and refined products offline, and that's roughly 11% of global supply. That's a gigantic deal. We are going to be feeling a pronounced crunch in which gasoline, diesel prices are at levels where a lot of people just can't afford to fill up their tanks, which is why July starts to look like a very difficult time here in the United States. An event like this can force humanity to use less energy, and I think that that is probably the most obvious outcome that's going to happen from this war. You're listening to the Great Simplification. I'm Nate Hagens. On this show, we describe how energy, the economy, the environment, and human behavior all fit together and what it might mean for our future. By sharing insights from global thinkers, we hope to inform and inspire more humans to play emergent roles in the coming Great Simplification. Today, I'm joined by repeat TGS guest expert on oil and geology and my friend Art Berman for a deep dive on the data surrounding impending oil shortages as a result of the Strait of Hormuz closure, as well as the subsequent cascades of complexity risk for modern civilization. Art Berman is a petroleum geologist with over 40 years of oil and gas industry experience. He is an expert on U.S. shale plays and is currently consulting for several E&P companies and capital groups in the energy sector. In this conversation recorded just a few days ago, Art unpacks his recent claim that the U.S. war on Iran may be the biggest blunder in human history, especially as more and more of the world reaches the point where the last pre-war shipments of crude oil exiting the Strait of Hormuz region arrive. Art walks us through why the United States is not as insulated from these supply shocks as many believe and extrapolates the data to describe just how severe shortages in the near future might become, especially with diesel. More than gasoline, diesel is the main fuel powering industry and transport and its increased cost will be passed along to you in nearly everything you buy in a store or restaurant or have delivered to your door. Above all, Art and I discussed these events in the larger backdrop of a civilization on the precipice, which he and I have been discussing and studying for years, decades, and what this moment might mean as a turning point towards the downslope of the carbon pulse. As Art said in this conversation, we always live in interesting times, but we're now approaching more interesting times than usual. I hope this episode provides some clarity on what might lie ahead. With that, please welcome Art Berman. Señor Petróleo, bienvenidos back to the show. Gracias, Nate. That's my nickname for you. Art Berman, welcome back. You've been on the Great Simplification many times. I'm looking forward to a 19-hour podcast with you to discuss what's going on with the oil markets in Iran, the Strait of Hormuz, and such. No, I'm kidding. You too. So, it is Wednesday, May 6th at 9.08 a.m. Central Time. I think it's important to time-stam this conversation because three hours ago, oil was down $15 a barrel and now it's down $6 a barrel because of possible breakthroughs and truce and a ceasefire. And then Iran saying, no, between the time we record this and next week when it is released, who knows how many other news announcements there will be. Let's just start there. You know, this war in your framing is the most consequential military, geopolitical, and economic blunder in modern history, you told me in an email. So, can you walk us through what brought you to that conclusion and what do you mean by blunder in that context? Well, the most obvious thing is that before the war, there were all kinds of problems as there always are and have been in the Middle East, but shipping was open and now it's not. To me, I mean, the war has been a negative and the effects on the global economy are so unbelievably terrible. We're just getting started with them. That, I mean, I think this is like the biggest blunder and possibly in human history, but certainly it is the biggest military blunder that I know of since Napoleon decided to invade Russia in 1812, which led to the end of the French Empire, led to his exile. I'm not suggesting any of those things will happen, but yeah, I mean, it's just a gigantic mistake from every perspective imaginable, but mostly it's a blunder based on energy blindness and a failure to grasp system implications. And so that's really, you know, that's like the worst blunder imaginable in my book. Well, you know, I agree with you on that. Although these things tend to then create opportunities and phase shifts for different ideas and conversations and responses that aren't anticipated in advance, and maybe we'll get to that a little later. So you've been on the show many times. We go way back talking about the importance of oil, the importance of energy, the importance of systems. But for maybe to anchor the scale for our listeners today, how many barrels per day flow through hormones on a normal day and what fraction of global trade does that represent and unpack that just briefly? For oil and refined products, it's roughly 21 million barrels a day on a normal day before the war. Which is exactly the amount of oil the United States consumes per day, by the way? It is very close to exactly that amount. And that doesn't include liquefied natural gas, which is another very significant energy export. There are other things that we'll get to, fertilizer, helium, sulfuric acid, etc. But let's just keep it simple and talk about oil for right now. So 21 million usually makes it through as of today, pretty close to zero, is getting through. The only oil that does appear to be getting through is Iranian oil. So, you know, not doing so well there if you're the United States. And of that 21, about 10, 10 million barrels a day of Persian Gulf oil, which is to say oil from Saudi Arabia, United Arab Emirates, Iraq, etc. is reaching the market by other means. So there are bypass pipelines, three of them to be specific, that are somehow managing to get oil out of the region without going through the straight of form moves. So if you take the 21 and the 9.5 and do the arithmetic, you know, that means that we've got something like 11.5 million barrels of oil and refined products offline. And that's roughly 11% of global supply. So that's a gigantic deal. We've never had that percent of global supply offline. And people always will take us back to previous oil shocks. And that's good and that's important. But we have to be able to compare apples and apples. I mean, if we're looking at oil shocks in 1979, 1980, the world used a lot less oil back then. So we have to be able to normalize those numbers one way or another. And how does this compare in magnitude to the economy from the 1979 oil crisis versus this one? It's 100 times greater when we're looking at rate and rate is always critical. So I look at how much oil was lost, how fast. And we look at previous oil shocks. And what we saw was that a lot of oil and a big percentage was lost over some period of time, like 12 months, 18 months, 24 months. In this particular case, we lost it all literally in a day or two. And depending on how you do the arithmetic, and I've done it a number of different ways, on a daily loss basis, it is 99 times greater than the 1978, 1979 oil shock, which was the Iranian Revolution, the Iran-Iraq War, which was the biggie. And you can calculate it other ways if you like, and you can get down to as low as about 65 times. So that's the lower limit. Why does it not feel like that? I'm sure it feels like that in Asia and Africa and maybe Europe. How can you describe that? There are leads and lags in every system that we talk about. And the lead, the leads in this case, are when did the last tankers that made it through the Strait of Hormuz, when did they reach whatever their ports of call were? And the answer is, depending on where you are in the world, they already have or they just did. And so in places where they already have, which includes places like East Asia or Africa, they're already feeling the pinch. In places where they just did, which includes the United States, we don't feel it yet. Now, we can layer into that, well, who has production of their own, inventories of their own, that provide a buffer, if you will, and that varies quite a bit across the world. But speaking as Americans, no, we don't feel it at all yet. I know in California, I was talking to one of our staff last night and gas is $8 there, so we're feeling it to some degree. Right. And gas and diesel are more expensive where I live, and I'm sure they are where you live, but we're not experiencing shortages and we're not experiencing any kind of critical gaps in supply. Will we experience shortages later this year? Oh, absolutely. Not so much later this year. Even if there is a truce and this war ends, we're going to have shortages. Absolutely. Can you explain why you're so confident in that? Yeah, because we've drawn down most of the available oil on water, oil that I just talked about that's already in a tank or somewhere. And we, as a world, at least a Western OECD world, we're drawing down our strategic reserves as quickly as is physically possible. That works out to be about 2 million barrels a day. So the key is not how much oil isn't moving through the straight-of-war moves yet, but how much do we have in our savings account, basically. I mean, that's what we're talking about. So this is like you are living off a trust fund and treating it as if it were renewable, but at some point you get to the bottom. And you think in the United States, you expect that's going to happen in the next few months, irrespective of what the peace results in Iran. Well, and it's not just me. I mean, there are all kinds of other people that follow this who I respect and I consult and I follow online and read their reports. And some of those select group of people, actually one of them, thinks that we're going to be at zero storage in the United States by July. I think that's probably an exaggeration. What would happen if we're at zero storage or even close to that? The world ends. That's like a really scary outcome. That means that you it's like you ran out of gas in your car. Everything comes to a stop. And until you can find a gas station or walk to one and get a can, you're dead. I mean, you can't go anywhere. Okay, what's your base case then? Forget about the one person who said we're going to be at zero storage. What do you think is the base case? I think by July, which is not very far off, that we are going to be feeling a pronounced crunch in which gasoline diesel prices are at levels where a lot of people just can't afford to fill up their tanks. And is this going to happen even if the war ends today or soon? Yes, absolutely, Nate. So there are several hundred oil tankers that are just parked inside the Strait of Hormuz. Okay, so now if suddenly there was peace broke out and Trump and Arragchi and whoever else decided to have a big party and their best buddies and the Strait of Hormuz is wide open. All the mines are gone. Everything's cool. Which I think is unlikely, but keep going. Yeah, it's more than unlikely. It will take two to three months before any of those tankers arrive at their destinations. So during that two to three months, there is no, well, you can't bring up production that quickly. So the only thing you can do is continue to draw down your buffers and your storage. Which is why July starts to look like a very difficult time here in the United States. Now, there are other complications in that it those are again, everything's fine. Strait is open. Those tankers, it takes them like, believe it or not, I mean, many days, if not weeks to get into the queue to go through the Strait. I mean, they're all over the place. They need to reposition themselves. And once they do get through, then it takes them a long time to show up where they're going. So okay, so we got one tranche of tankers of several hundred and several hundred million barrels. But now we got the problem of all the production in the Middle East that's closed. They shut in. All right, how long does that take to reopen and get back online to some level of previous production? Months, probably. Now, the part we didn't talk about is, okay, everybody's happy and having a big party, but there's still mines in the Strait of Hormuz. Those have to be removed. How long does that take? Weeks, months, I don't know. And it's not just a simple matter of, you know, Captain Smith says, Oh, great, it's open, let's go. Well, Captain Smith has owners and he needs insurance. And there is no insurance right now. So legally, he can't drive his boat. And the people that own that very expensive tanker that's loaded to the gills with, you know, millions and millions of dollars worth of crude oil, they have to say, okay, we think it's safe to go now. So there's a million little pieces that have to somehow come together in a good way before that oil starts moving. And then we have to be able to refill it when those tankers are gone. So that's the best case. So my view is, in the best case, we will be screwed through the rest of this year, no matter what. Screwed being significantly higher gas, diesel, etc. prices and the downstream effects of those. Because the supply is simply not available. Or available in much lower volumes, and therefore at much higher prices. I agree with that. But help me understand, forward dated oil prices are up 20 some dollars from when the crisis started, whereas front month is up like $50. So it seems like January 2027 out to January 2028 are not really pricing in a long term crisis here. They're in the upper $70, which is higher, but not disaster. Why do you think that's not such a clear signal of all clear? There are two markets. There's a financial market, which is the futures. And there's a physical market, which is what we call spot. So if I want to buy a barrel of oil today, that's the physical market. And that barrel of oil, on average, in the world is going to cost me like $140 to $160. It's going to cost me more in some places, maybe a little less than others. So some people say, oh, well, that's the true price of oil, because that's what you have to pay today. Wait, $140 today, futures right now are at $95 next month. That's what I said. That's a financial market. That's not the same thing. Okay. So if you look at Brent, for instance, the price you're looking at is a contract that expires in late July. That's not today. So we just started May. So that's May, June, that's three months in the future. That's what that price says. So you know, at least as well as I do, that financial markets discount everything in the future, right? Yeah. So now the question is, if Brent is at 110 today, and the physical market is 150, is 110 a reasonable discount three months out, now we can have an argument about whether we think that's reasonable or not. But people that are buying physical oil today, May 6th, are paying roughly $150. And from that, in order for them to make profits in the refining, turning it into all the 6,000 products that come from a barrel of oil, that is going to be a higher gasoline and diesel prices than $95 WTI would suggest. That is right. And while we're on that subject, there's another there's another complication and that is refineries themselves. So refinery has to make a profit. And if it has to pay $150 for a barrel of oil, then the only way it can make a profit is if it sells its products for, for more than that. So it has a margin that it has to achieve. And, and if it can't achieve that, then it's going to cut back on its refinery throughput, because it's not making any money, regardless of what the price of oil is. And so when, when a refinery cuts back on its throughput, we have the same kind of problems that occur when an oil field closes production. There's, there's all sorts of leads and legs and potentially damage that occurs along the way. I've been so busy, as you know, the last month on various things. But when you were speaking there, I had a thought that I really haven't thought about recently is if this crisis continues, which you and I think is fair odds that this isn't going to stop. And even if it did stop, as you said, it takes a while for those mines to be removed and the tankers to arrive and all the things. But this, this places such a huge stress on society that I wonder how much government intervention there will be with refiners and other things. And you mentioned the word rationing earlier. I mean, we could have a real interesting summer. Yeah, we, we, we all, well, we always have interesting times, don't we, Nate? But, you know, this particular summer and the rest of this year will be, will be especially interesting because you and I and a lot of our colleagues have been imagining when something like this might happen. And back 20 years ago, I think we, we thought it would happen sooner than later, but now it is happening. I have so many questions for you, Art. And let me ask you this. So the concept of peak oil, that at some point in the future, there will be a maximum of petroleum that humans extract. And from that point, it will decline after. Let's just outline what the various variables are with respect to this blunder, this military blunder, how that might affect the, the future slope of oil. I can think of number one, it's higher prices. So there'll be more drilling. Number two, higher prices. So more demand switching, less affordability. Number three, and this is a big one, is I think the global rising tide lifts all boats, dynamic where all the countries cooperate towards GDP and everything. We're going to switch to energy security. And so there's a game theory math where the east and the north are going to have different arrangements versus the west and the south than we have in the past. And I've likened this to the superorganism kind of calving in two. And so all, all of that changes the shape of the future supply of, of oil. And it becomes above ground factors are now going to matter as much or more than geology and technology. What are your thoughts on all that? Yeah, many for sure. The first is we go back to the 1970s, the early 1980s, and the phenomenon you just described, where oil price gets high enough that, that stimulates a lot of drilling, and a lot of new oil is discovered or developed. And usually, or in that case, what happened was we ended up with too much oil. And, and, and, and we, you know, it took some, some time to work through that. Well, we're not in that Kansas anymore. You know, it's not like we've exhausted all the supply that's out there in the world. But for the most part, there hasn't been a heck of a lot of what I would call exploration going on in the world in this century. Back in the 1990s, we were going great guns in the deep water in the Gulf of Mexico and West, West Africa and off the coast of Brazil. And we were finding all kinds of new, new oil, albeit at very expensive and, you know, many, many thousands of feet of water, but we were finding new reserves. Well, we don't really know where those are anymore. Now, I'm not saying there, there are no new big reserves. We found some pretty big reserves off of Guiana in South America. There have been some, you know, some, Brazil has found some fairly large reserves of relative to what we've been looking for recently. You know, there's some big fields that have been discovered off of Namibia, but, but compared to what was available or what we were finding in the 1980s, I mean, this is, this is a drop in the ocean. And, and, and just like back then, just because you discover it doesn't mean that you have it. I mean, it takes a long time to bring those fields online. So that, that, that's the first problem. I'm not saying that we're out of oil because we're not, but we have a whole lot less available to us in big accumulations, as far as I can tell, compared to 40, 50 years ago. So just because oil price gets high doesn't mean that all of a sudden we find a whole lot more oil. We might, but I think the odds of that are much lower. I want to let you finish your answer on this, but I have to interject here. There are a lot of people, well, I've read some people anyways, believe that AI will help us find more oil and find more energy and that energy is going to soon be abundant and we don't have to worry about any of this. And I think in the markets that belief is more prevalent than yours and my biophysical viewpoint, what are your thoughts on that? Bluntly nonsense. I mean, I mean, the oil industry is among the most technologically advanced industries anywhere in the world. I mean, the imaging technology that the oil industry, the gas industry uses is equal to the medical industry. We're using basically the same technology and it's been that way for 20 years. The industry that I used to be part of, I'm still doing a little bit of consulting in oil and gas, but most of my work today is wider boundary, as you would say, but we've been using what people call AI in the oil and gas business for 20 years, neural networks, machine learning, I mean, call it what you will. This has been standard fare for a long time. And so the question I ask, would ask to those people that expect miracles is, tell me what we're going to be doing different with AI than what we are? We're going to increase the ultimate estimated recovery rate of these fields by a 1% or 2%, which ends up being a huge amount, something like that is what I've read. And that's been the bedtime story for the 50 years I've been in this oil business. It's always something, you know, we're going to find some magic fluid that we put down there that somehow gets us another percent or two, or we're going to inject CO2, I mean, it's always something, and it never quite works out. That doesn't mean that it never will. It's just that it hasn't so far. No, I'm well aware. So getting back to the question, what does this do to the concept of peak oil? I guess it's a two-part question. The timing of it, and then the ultimate decline rate of it, can you speculate on that? And I personally think the majority of this is going to be the new geopolitical relationships that ensue from this military blunder. I totally agree with that. And so the Persian Gulf, it's not going to go back to the way it was before. The confidence is gone. The whether that is for shipping people, insurance people, production people, I mean, the idea that that was a pretty safe place and a good place to do business is gone. So right away, you've got a big damper on what's going to happen in the future. You're adding risk premium to everything involved in that chain. And that's the other, let's go back to the reality of whatever peace there may be in between Iran, Israel, and the United States. So just this week, we had project freedom, which was going to be Trump and Hegseth's escort service through the Strait of Formuz. All right, that lasted two days. Nobody wanted to be escorted because it's too dangerous. And so what did Iran do? Iran said, okay, you guys have an escort service. We're going to lob a few missiles at the United Arab Emirates at their loading port of Fujairah, which is on the other side, the good side, if you will, of the Strait of Formuz. And all of a sudden, the narrative was stolen. The escort service was no longer the talk of the town. It was, oh my God, Fujairah is on fire. So now Trump said, okay, we're done with that. That's over. So I mean, Iran has planned for something like this for a long time. And they are very good at using this drones and these special little missiles that goes directly to ships. By the way, there's a big oil slick off of Karg Island this morning, according to the satellite imagery. We don't quite know what that's from, but probably they hit something. So they're in control. And they can very cheaply create havoc, further havoc on what's already a very chaotic situation. So I guess, segwaying back to my original question, what do you think the one year, five year, 10 year, 100 year looking back to this moment, what did this do to the carbon pulse and humanities metabolism? Did it allow us to increase our metabolism or did it probably stop it in a heart attack sort of way or something in between? Yeah, it's a lot closer to the second. You and I have both called this a world changing event. Yeah, there's no way we're going back to the way things were two months ago. It's not ever going to happen. No, we're not. And for a lot of people, when they hear that, that's a scary thing. Oh my gosh, you know, I mean, and I admit that uncertainty unsettles me also, although probably not quite as much as other people, because I see opportunity in a world changing event. I mean, you and I and many other people, colleagues included, you know, it's easy to get into a criticism of the path that the human species has chosen or has been chosen for us to be on here, certainly in our lifetimes. We've done this wrong, we did that wrong, yeah, we should be doing this, we ought to be doing this. Why don't we have policies? Why don't we do blah, blah, blah, blah, blah, blah? Okay, I'm not really interested in, you know, in going down that rabbit hole right now. But an event like this requires an adjustment whether we participate in it or not. And that can be a very good thing. That can do what no policies can ever do. It can force humanity to use less energy, for instance. And we can have a 90 minute conversation about all the pluses and minuses that are involved in that. But that would be a very big deal. And I think that that is probably the most obvious outcome that's going to happen from this war. And it was going to happen anyway. It's just that the war accelerated the process. I agree. I think the war shortened the runway to what I refer to as the great simplification, because we're going to have to reduce our complexity of our systems. And probably this is going to accelerate de-globalization in many, many ways. And it just feels like emotionally in the conversations I have and reading the news, I mean, you and I know that the Titanic hit an iceberg metaphorically. And yet the band is still playing and drinks are still being served up on the upper decks. And it's fascinating to see that and to feel it in slow motion. I think that's a normal human reaction. That as long as the music's playing and the drinks are flowing, there must not be any problem. I'll know it when I see it, right? Yeah. Well, we're seeing it in slow motion in the U.S. with rising, I mean, we're 50 cents away or so from all time highs in gasoline prices. But other countries are facing it now, like big time. And every week that goes by, this is worse for the global south, much worse. And I mean, I don't see that in our news either. But you and I live in the U.S. So let me get back to one of the other things that you've helped me understand. You see all these charts that the U.S. is setting record oil exports. And we're not even an oil export order. We import like over 6 million barrels of crude the last couple of years. So can you help me understand what is really going down? Are we a net oil exporter, importer? What is the story there? So the United States is a net energy exporter. Not a very big one. So net obviously is the difference between what we export and what we import. And so when I say we're a net exporter, that means that we export a little bit more than we import on balance. Okay, so what does all that mean? Well, that's crude oil, refined products, natural gas, natural gas liquids, coal, electricity, all the things. Okay. All right. And how do we end up with knowing that we're a net exporter? Well, because we convert all those things to a common unit, whether it's jewels or British thermal units or barrels of oil equivalent. And you know, and anybody can look those up and do that conversion. What that does is it says it's all the same, that the end use of coal is not any different in that calculation than the end use of natural gas or oil or electricity. And of course, that's not anywhere near true. But that's what you know, that's what you have to do. You have to normalize all the inputs. And so when we see the answer, it's a statistical answer, it's a derivative, it's actually a derivative of a derivative. And we say, Oh, great, you know, we're in good shape here. We're a net energy exporter. It's true. But it is deeply misleading, because not all forms of energy are equal. They're not equally valuable. They're not equally useful. They're not equally fungible. Okay, so that that's where the whole idea breaks down. And so we can do all this chest beating, aren't we great? Well, okay, let let I'll, you know, what's what's the lawyer say when he just, you know, says, Okay, I'll give you that, I'm not going to fight you on that. Okay, we'll, okay, we're great. Now what? And what what happens next? So when we deconstruct it, what we find and you just mentioned it is we are a net oil importer. And I'm not a partisan oil guy. It's just that oil is the most important piece of the energy package because it is got the highest energy density. And it is the easiest to move around physically through the system. You don't need pipelines, you don't need to cool it, you know, 280 some odd degrees below zero. I mean, you just, you know, you put it in a refinery, it comes out the other side, you dump it in your car, you know, you put it in your in your in your heater, you do whatever you need with it. That's why I mean, you've called oil pixie dust. There's a reason and it's got a lot of negatives to it in the way of emissions. And I'm not minimizing those for a minute. But it is the most magical source of energy that humans have ever discovered. And and it is the, you know, I don't know what the percentage is, but I'll make up a number, you know, it's probably at least 50 or 75% of the reason that the world is at least on paper much more prosperous than it was 100 years ago. Now, not that all those other things don't contribute to, but oil is the master resource. And so when when somebody says, well, we're a net exporter of energy, I say, well, that's great, but we're a net importer of oil. That makes a big difference to me because oil is kind of in a different category. So break that down. We're a net importer of oil. Impact that. Yeah, so we export on average about 4 million barrels of crude oil and condensate per day. And we import on average, when I say on average, that's like, you know, a 2025 average number per day. And somebody say, Oh, I heard we just exported 6 million barrels a day of crude oil last week. Yeah, yeah, we did. But, you know, that was an extraordinary week. We import 6.5 million barrels of oil a day. Now, we used to import a whole lot more. We didn't use to export hardly any. And in my lifetime, in your lifetime. So this is a this is a dumb question. I think I know the answer to it. But some, I mean, I think what you should explicitly say it, someone might be thinking we export 4 million barrels a day and we import 6.5. Why don't we just net that out and just import 2.5? That's exactly right. But why don't we do that? Why don't we do that because the oil that we export is different than the oil that we import. Right. Okay. And again, now we're back to utility. What's it good for? Okay, now I just got done saying that it wasn't very many years ago, 10 to be exact, that we didn't export any crude oil to speak of. All right, we had to pass, we didn't have to, we had to pass an act of Congress to lift a ban on crude oil export that was put in place after the oil shocks of the 1970. I think Gerald Ford was the president at the time. And it was a bipartisan, unanimous vote. Yeah, yeah, yeah, we, we can't ever do this. This is, you know, we can't have this again. We can't have the lines at the gas stations. Terrible. All right. So we had to lift that in 2016 because we had all these shale producers that were producing more oil than we could use in the United States because it wasn't the right kind of oil. Okay. And when I say it's not the right kind of oil, I don't mean it isn't good oil. It's just that most of the oil that we produce in the United States is what's called light oil. Okay, which means oil is a product that gets naturally cooked by being buried in the earth. Okay. And so when it's been buried deeply and heated for a long time, you, you cook off a lot of the heavy stuff. And you're left with a very light kind of a, of an end product, you know, sort of like when you, you know, when you, when you, when you, when you, when you put alcohol in a, in some sort of a stew and you, you heat it, you know, a lot of the alcohol boils off. Well, you know, or, you know, my wife will then she'll reduce some lightly distilled mixture by adding something to it. Well, I mean, those, those are reasonable analogies, but the bottom line is that the kind of oil that the United States produces on balance is good for certain things. It's great for producing gasoline because gasoline is kind of a light product. It's great for producing petrochemical feedstocks, plastics, those are light products. It's good for natural gas liquids. It's great. It's really great for all that. And back in the 1940s and the 1950s, the U.S. was largely oil independent because the main use of refined products was gasoline. I mean, nobody drove a diesel car, you know, in the 1950s there. I mean, trains were starting to run on diesel. Some still ran on coal. So as long as you have a gasoline economy, U.S. oil is great. But around the 1970s, the people who run the refinery said, well, you know what, right now, the big, the big cash product is diesel and jet fuel. I mean, when I was a kid, I remember getting on an airplane and asking the flight attendant, is this a jet yet? Because I knew they were coming. No, we're not there yet. You know, we're still a propeller plane. Ah, darn, I wanted to ride in a jet. So of course, now you can't hardly get on a passenger plane that isn't a jet. So our needs have changed. We're using more diesel and more jet. So refineries changed accordingly. So we have to, I think you said this in other appearances on TGS, we have to import heavy oil to pair with our light oil so that our refineries can produce the entire spectrum of product that they were designed for and that the society is currently wanting and paying for. That's exactly right. And it's not as simple as we just mix them together. You know, it's not a blend. They actually have to go through different parts of the refinery. Well, see, this is the other aspect, which as you know, is one of my four horsemen of the 2020s. We talk about energy shortages. Sorry. They're saying complexity is one of them, right? Yes. We are a net energy exporter, but we're a huge importer of complexity. Because these barrels are barrels, but the whole system is a Rube Goldberg machine that can have a very unexpected shortfall risk when something goes missing. So we are importing a bunch of oil and we're exporting a bunch of oil, but that's all to fit the demand of the products that are in our refineries. Couldn't we build new refineries that are targeted just for what we have domestically and maybe with Canada? Or that takes a lot of capital and lead time and confidence in policies and administration. So I'm guessing the answer is likely not. Well, let me just say first of all that the technical name for the kind of refinery that we have here in the United States and around the world, it is called a complex refinery. That is, it's official name. I didn't know that. Wow. It is. Okay. Yeah. Okay. And so before I answer your question, we take the light oil and heat it up and put it into what's called a refining tower where the various different fractions come off at different temperatures, the gases and the gasoline and the naphtha and etc. etc. The heavy stuff, we have to, some of it, the stuff from Canada, since you mentioned, it's so heavy that it has a lot of solid junk in it called bitumen. We can't put that in the same part of the refinery. We have to put that in a separate part of the refinery that goes through a catalytic converting process, a hydro, you know, hydro, coking. I mean, this is a whole separate part of the refinery that effectively upgrades that tarry crap into the kind of product that we can then start to extract diesel and jet fuel from. So we don't mix them together. That's not the way it works. And so we've got a very complicated, complex situation going on to yield us the products that we need. Now, your question, maybe you have another one before I answer that. Oh, I have like seven more, but please go. Okay. Please keep going. I'm sorry. So your question is, can't we just upgrade or modify the design of these refineries to make it just right and okay? Yeah. And the answer is no, you cannot get from something that which it doesn't have to start with. You can't make diesel from light oil because it doesn't have the necessary components to make the diesel. So if we want diesel as a society, we have to import oil full stop. Yeah, absolutely from somewhere. And, and three quarters of the oil that the United States imports is from Canada, which ought to be a good thing, right? I mean, they're our neighbor, they speak the same language, etc, etc. Except we have a situation in which our president decided to piss off everybody in Canada and their prime minister because, well, because I don't want to get political. This is a dumb question, but please enlighten me and, and the viewers. How important is diesel right now to the United States economy? I know, in the local gas station here, there are diesel pumps that farm equipment and such uses, but, but how important is diesel to the US and the global economy? And what is a global diesel balance right now? Diesel in a way is the global economy. Diesel runs all the ships, all the trains, all the trucks, all the agricultural equipment, all the mining equipment. There are more things that diesel does, but that's enough. Yeah, right. And, and, and those, those uses don't have scalable substitutes, at least, you know, not, not in, not in the near term. So you're stuck. If you don't have diesel, you can't move anything. You can't mine anything. You can't, you can't do very much of anything. So your economy comes to a screeching halt if you don't have diesel. So where is the global diesel balance today's May 6th, roughly early May? And what would a meaningful deficit look like on the ground? Ask people in, in Singapore. Why? Well, because they're already feeling the shortage. They don't produce any petroleum of their own. So they're 100% reliant on imported oil. And as with the rest of Asia, East Asia, almost all of it comes from the Middle East, and they're just not getting any. So I mentioned, you know, $150 a barrel for crude oil. I don't know what the current spot prices for diesel in Singapore, but the last time I checked, it was $210. $210 oil equivalent. If you wanted to buy 42 gallons of diesel in Singapore, it cost you over $200. Right. Okay. So that tells you everything you need to know. And, and if diesel is costing over $200 and you need it to run your, you know, all of your transport and your mining, if you have it in agriculture, which you do, then you're in deep trouble because you can't make it, you can't make a margin on that. I mean, I think you've, you've talked about oil as being the hemoglobin of the economy. For me, diesel is the barometer of the economy that, that ordinarily, so when, when gasoline prices get high, you and I might say, you know what, I'm not gonna, I'm not gonna drive today, or I'm gonna only fill my tank halfway. Okay. So my, my, my hour gasoline demand is elastic. Diesel demand is quite inelastic because you can't do anything without it. And so what happens is, is that you pass on the price of more expensive diesel and it shows up in all the products until people stop ordering the products. And, and so when diesel finally decreases in abundance, then you know your economy's in trouble. You know, as we've been talking, I'm trying to reflect in a wider boundary perspective. You and I have known each other for a long time and we're buddies, we're, we're friends and we're colleagues because we research and talk and look and correct each other and help each other with charts and stuff. It's been really jovial over the last 15 years or so because we're, we're, we're solving a puzzle of the human ecosystem. It doesn't feel jovial to me now. I mean, because the conversation we're having right now makes so much sense to me because it rhymes with all the conversations we've had in the past. Yet it is not the conversation that the movers and shakers and decision makers and planners and risk experts and others in our society are having. And yeah, the timeline between hitting the iceberg, which was this, you know, unintended consequence of the Israeli-Iran war and the US is involved, it's going to show up in our world very soon. And so the, I mean, this is so serious. And I want to be my gregarious Midwest golden retriever Sasquatch self, but this no longer feels like a dress rehearsal sort of situation. And of course, the future is a probability distribution. And as you said, we're going to have responses and this is an opportunity. But there's been a phase shift in our own analysis and our own observation of this situation. Totally right. And I just want to, I just want to make a point to viewers and listeners. And that is, I mean, this isn't just what Art Berman thinks. What all the people that are other than me are saying the only difference is how bad will it be? And when does it get that bad? Yeah. Nobody who knows anything about energy and oil in particular is Joe Field right now. So this, you know, I'm not, I'm not giving you an extreme perspective. No, I realize that. Well, I know you do, but I'm not sure that everybody who's listening and watching, you know, maybe they say, well, you know, that's Berman. I mean, he, you know, he's, he's way out there. And, and, and maybe I am sometimes, but in this particular case, I think I'm, I think I'm representing, you know, like in the middle of a cross section of different perspectives by people other than, than me who also study this full time. It's very serious. It's grave. Yeah. So Rory mentioned, and I think you've said this as well, and, and others because it's demonstrable, we've lost around one billion barrels of production from the homeostasis that existed before this crisis and lost supply does not come back. But I looked at a recent one of your, your PowerPoints you shared with me and your base case has traffic in hormones normalizing, but not until December of this year. And you expect Brent falling back into the low 100s a barrel by 2027. How do you reconcile those two views? Well, it falls back into the low hundreds and then it climbs back. It doesn't get as high as, as it probably will in coming months. But back to a comment you made before, these are, these are probability distributions. There's no historical precedent for me to credibly give an outlook or a projection. Well, you can, but with a huge error band, of course. Well, we just don't know. I mean, we've never been here before. Yeah. And, and so anything that I say or put in a graph, I know when I put it in a graph, you know, it looks concrete, but you know, it's still got hair all over it because, because we just don't know. But, you know, I think the base case is, you know, it, I think it's a little optimistic, but, but it's still pretty, it's pretty frightening. You know, we could talk about the adverse case if you like, but it doesn't matter. I mean, the bottom line is that what, what the case reflects is that we are going to be with constrained oil supply until we stop using oil. Yeah. Basically. That's a major statement. We're not going back. You know, we're not going back to 2025. We're not going back to oil being seven. I mean, you know, there might be a day when it's $70, but on a monthly average, we're not going back there. Personally, and again, this is part of my distribution. I think we're not done militarily there. And we're going to hold off until after Trump meets with Xi, which I believe will be May 14th, which when this airs, that will be tomorrow. But I, we haven't returned any ships. We're still building up military capacity. And I think it's ill advised, but the military aspect of this is not over. And any future military disruption from this point makes the scenario that you're discussing worse. I mean, probably worse anyways. And then we haven't talked about China and Russia and, and how they're integrated in all this. Do you have any thoughts there? I saw a chart this morning that Kepler posted. Kepler is a very high credibility organization that tracks tankers and oil flows and prices all around the world. I think everybody has a lot of respect for Kepler and well, sure somebody doesn't, but in my community, everybody does. We don't always agree with them, but there we take them seriously. Kepler published a graph this morning showing the most likely couple of family of curves for Hormuz traffic. And their best case is it'll be at 40% of normal by the end of the year and into next year. Well, even if it's 100% of normal, we're going to have product shortages in the US this summer. So at 40% of normal, the great simplification will have started for a lot more of the world. Well, and the point is, is that I mean, their graph stops at the end of 2027, but it's a flat line. And so as long as, as long as this situation, whatever the military escalation becomes, Iran has no intention of opening Hormuz because that's its leverage point for the whole world. And so what Kepler is implying is, you know, buckle up people because we could be at 40% or 50%, I don't know what the right number is, it could be 60%. It doesn't matter what it is. We are going to be at seriously more constrained volumes of flow through Hormuz for as far as Kepler can forecast. Okay, so let's just say that that's possible. Let me run into a different area. Vaklav Smil has argued, credibly in my opinion, that cement and steel and plastics and ammonia are the four pillars of modern civilization. Those are all created and distributed with oil. So this isn't just gasoline and diesel, but it's so many things. But steel and cement are already declining and fertilizer is flat and plastics are below their peak. Hormuz aside, and then you could add that in, do you think we're already past the peak of the global material economy and the financial layer just hasn't caught up to the physics of the molecules yet? That's certainly what the data suggests. So I mean, I made that chart months before anything was happening in the Persian Gulf. And what that chart shows is that we are in varying stages of peak plastic, fertilizer, cement and steel. Now, not all of them, plastic is still growing a bit, whereas steel and cement and fertilizer are declining. But I very much agree with, there's very little that I don't take seriously that Smil says, because he's kind of the grand master. He's the Gandalf of energy. And if he says he thinks this is true, it's probably supported by data. And so if you think about it, cement and steel to stop there for now, there can be no growth without cement and steel. I mean, go look at any construction site in your town or nearby town. And what you're going to see is a lot of cement and a lot of steel, including the equipment that the cranes that put that up. So that's a problem. If you look at your car, whether it's an EV or not, the great volume, majority of the volume of that vehicle is steel and plastic. If you go to a hospital or a doctor's office, the medical industry is one of the leading consumers of plastic. You don't have plastic, you got no healthcare. Forget about baggies and all the other things that we care about. Well, you have healthcare. It just looks radically different than the current system. Well, that's a good point. Fertilizer, you can't possibly support eight and a half billion people without fertilizer. So, I mean, Smil has very good reasons for calling these the four pillars of civilization. And if only one of the four pillars is flat or declining, then civilization is on shaky ground. And what I just described is that three of them have been declining for five or seven years or so. Yeah. Yeah. So that's a serious thing. Bring in renewable energy, which I refer to and you do as well as rebuildable, because the sun and the wind are renewable. But the solar panels and the polysilicon and the steel and concrete needed for wind turbine bases are at best rebuildable. What is Hormuz and the situation unfolding in the Middle East portend for renewable energy? The knee-jerk first reaction is, oh my gosh, we better get as much renewable energy as we can because clearly petroleum and natural gas are unreliable. So from an energy security standpoint, forget about the environment. There's an awful lot of people right now that are thinking we better really go full bore on renewable energy because it's the only thing we can count on. All right. Well, there are a lot of problems with that. But before we go there, as you just said, you can't make a solar panel or a wind turbine or an electric car without fossil fuel inputs, not least of which are steel and plastic. But more important, you're just trading one dependency for another because there's an awful lot of critical minerals that go into all of those products of which, you know, things like copper and lithium and cobalt are just some that I know how to pronounce and don't have 16 syllables in them. But they're all controlled by China. So you don't want to be dependent on the Persian Gulf. Okay, I get that. So now you're dependent on China. And I'm not, I'm not, that's not a partisan statement. The China's bad. I'm just saying it's you're dependent on someone else is what it is. You watched my frankly, that's going to come out in two days from this recording where I mentioned locally here, the boundary waters canoe area has just been opened up for mining. So in order to be more sustainable and solve climate change, we have to destroy our current wilderness in order to mine for nickel copper and and cobalt to help the energy transition. So it's a mess. Hey, you know, just just on a personal note, I spent my first summer in what was then called the the Quedico wilderness area. There is it's the same thing. It's just the Quedico is across the border in Canada. Yeah, right. It's they joined in 1965. Holy cow. One of my good friends had his driver's license and I didn't. And somehow or other, we persuaded our parents to let us drive to Ely, Minnesota, his jalopy, you know, rented a bunch of canoes and freeze dried food and spent three weeks out there fighting bears and all kinds of portaging. Yeah, I can't pull it's now now they're going to mind mosquitoes as big as bears or flies, black flies. Yeah, black flies. That's that's my one of my heavens. And so it's unfortunate that the super organism hungers. But this is a problem here because I think the majority of the leaders in the environmental movement are just looking on the upslope and focusing on climate and emissions and they're not looking at the downslope and how we're going to have to protect local and regional environmental areas when all this stuff becomes less available from places overseas. Energy security or security is going to trump everything else. That's the way the super organism is the way humans are, right? Well, it's it's people are already in Europe burning trees because of what's happening in Hormuz for heat and power and such. So one other thing I wanted to ask you not particularly connected to the Hormuz situation, but we're seeing AI demand for hyperscalers and data centers and energy surge. And one of the things that you've called to my attention is US electricity has grown continually, but the amount that is dispatchable has actually fallen over the last 20 years. And you you talk about something called the interconnection queue as something being important. Can you explain why this is is all important and why you're talking about it? Sure. So dispatchable energy just means it's available on demand. You know, it's like a dispatcher in a cab company. You know, you want a cab, you call the dispatcher, the dispatcher dispatches the cab because the cabs are cruising around, they're available. The problem with renewable energy is that it's not dispatchable or it's not dispatchable all the time. It's dispatchable when when the sun is shining and the wind is blowing and it's not dispatchable when it isn't. And so short of having all kinds of forms of backup, battery and whatever, there's a shortfall. And so all of all of the growth in US electric power over the last probably 10 years, it's all been wind and solar, which is not dispatchable. The dispatchable power is declining and most of that is because of coal. Now a lot of people don't know this, but the US coal production industry is dying. I mean, US coal production has decreased to levels that are just astonishing. And people who think that, well, you know, it's going to come back, need to look at a graph of US coal production. I'm not saying it couldn't come back, but there's absolutely no evidence to suggest that it is. A lot of the viewers of this program would think that's a good thing. And it's certainly a good thing for emissions and health in general. But it's not a good thing if you're a data center guy and you want a whole lot of electricity or need a whole lot of electricity to power your data center. So where are you going to get it from? And so the point that I made to you, I think earlier this morning in an email, was that when the so-called hyperscalers, the folks that are building all these data centers, when they kind of let it out that, oh my god, we're going to be expanding electric power demand in the United States astronomically, or at least we're going to get into growth, they didn't even give the renewable guys a call because it's like light oil if you need diesel. It's perfectly fine electricity. It's just it's not fit for purpose because it's not dispatchable. And so when the data center guys are looking for power, they immediately jump to natural gas and nuclear because that's dispatchable. And natural gas plus batteries I've read. Well, there are some people that are using jet turbine engines. You can't get a natural gas turbine for five years, they're back ordered and they're all from China, by the way. But maybe you can find a few old Boeing engines, you can stand up next to your data center. So this is a, you know, so here we have all these people that are, you know, that are feeling very good about the increase in renewable energy, but the first real need for electricity, they didn't even get a call. And I don't say that to criticize renewable energy, it's just if you can't use it for the biggest increase in US energy demand in 40 or 50 years, that's telling you something right there. Now, you asked about these interconnection queues and you know, that's a $10 word. But basically, what it means is that if I want to build an electric power plant of any kind whatsoever, doesn't matter coal, natural gas, renewable. Before I can go on with it, I have to provide the local grid operator with a report, which explains how my new generating source is going to affect his grid. And so it's sort of like, you know, an environmental impact study, if you will. So I'm going to submit it, and then it's going to come back and they're going to say, well, you know, these are all the things you need to fix, because these are not acceptable to me. And so what it gets down to is that all of the capital that we hear about, you know, available for various kinds of electric power is somewhat irrelevant, unless it gets through the hurdle of the interconnection queue. Unless somebody says on the other side, okay, as soon as you build this, we will accept your energy. This gets back to the importance of the difference between power and energy. It's a rate. Yeah, just like the rate of decrease in oil supply in Hormuz. And so power is energy per unit of time. And energy itself is a very nice thing to have. But if you don't have enough of it to keep your, you know, your YouTube TV going or your flashlight operating at a high enough intensity to see what the hell you're doing, or, you know, you run your, I mean, it's power that you need. It's not energy that you need, at least in our society, in our civilization, we value power. And one of the open questions is animals value power. And could our knowledge of the maximum power principle writ large, alter our future cultures so that we can live more with intermittent, we do work when the sun shines and the wind blows, but not all the time 24 seven, we're actually headed in the opposite direction with data centers and 10 to 15% of our electricity going in that direction in the next five years or so. But it's possible. It's possible with fewer people or with lower intensity activities. They're always trade offs. And so people, I think the problem that I see with well intentioned, you know, good people who want a better world is that they, they, they want a better world without having to give anything up. And that's just not the way the physical world works. You know, it's not a, it's not a value judgment. It's not a moral statement. That's just the way that the physical world works. No, I mean, I agree with you, but there are a lot of people that also want a better world and they have very little to give up left. So that's a demographic as well. Sure it is. But I guess, I guess the point I'm trying to make is that somewhere along the line in all these things we're talking about, what seems inevitable or unavoidable is that growth has to take a hit. Not because we voted and agreed that it should, although that would be nice, but because we were just not going to have a choice. I fully agree with that. And the thing we haven't talked about is that we paper over some of our biophysical claims with more money and more debt, which ends up making the problem worse in the future. So I think when we have a problem, when, when you, you just said growth takes a hit, I don't think growth is going to take a hit until growth is over. Because that big step down is a doozy. Once growth cannot support the maintenance of financial debts extant, then we might have a cascade down like a 1930s sort of thing and we might grow again from that level. But I think that's the logic of my entire platform here is at some point, the global throughput of approximately 20 terawatt, continual power and the resulting material, copper, lithium, cement, all the things, we're close to the peak of that now. And what does society do in coming decades in response to that is, remains the central question. And I think we also agree that it's, it's not what society does or chooses to do, but what is done to society that's probably going to be the story to follow. Tell me more about that. I mean, I think we aren't going to choose and vote to change this. We're going to have to respond to what happens. But what did you mean by what happens to society? Right. So what I mean by that is, is that, I mean, let's just, you know, zoom right in to where we started with the straight of four moves, that if any of the scenarios I'm talking about are even close to right and given the big error bars, it seems unavoidable to me that we're going to get back to anywhere close to the amount of oil that we had available to us three months ago. Yeah. And we can argue about what percentage we're going to be, we're going to be down. That's going to have immediate implications for the metabolic throughput of our entire civilization. And so, you know, you talk a lot about, you know, degrowth is what we should do and post-growth is what we're going to do. It's the same logic. There are a lot of things we should have done, but didn't for one reason or another. And now it's going to be imposed on us. And one way that it gets imposed on us is by just not having the materials available. But I think there's another way and that is the earth is a system. And at some point we get the revenge of the ecology, that we don't want to think about the fact that all of our wealth comes from nature. And as we are continuing to degrade nature, that there comes a time, is a lag there for sure, where nature simply cannot provide not only what we need, but can no longer regulate the stability of the system. And those are terrifying thoughts. But from a macro metabolic level, this might be a reprieve on nature in that regard, the Hormose situation. Let's hope. Let's hope. So, in the interest of time, because I know you have other engagements today, I will move to some closing questions. I am surprised to find out. It's been over a year since you were last on the show. You were on a reality roundtable with Michael Evry and Isabella Kaminska in March of 2025. So, let's not wait another 14 months to have you back on. But let me ask you this. What have you changed your mind about since that last appearance on the program? So, forever, or almost forever, I had this idea that I think a lot of us do that the agricultural revolution came along and it created a surplus. And then we had the surplus and that created growth and all sorts of things emerged from that. And then we got to cities and etc. etc. And I think all of that on some level is true. But since we're talking about a war today, which we weren't, what's changed for me geopolitically is that I think an awful lot of that story of surplus is a story about war. And I'm surprised to hear myself say that, but I really do. And nothing I say is original. If I'm good at anything, it's synthesizing what other people say. But Peter Turchin really blew me away when he gave a lecture, I don't know, maybe it was six months or a year ago. And he made that statement. In fact, he said something to the effect of farming provided the calories, weapons set the pace, bureaucracy turned energy, and war into lasting power. And religion made it easier for people to accept. That's almost a direct quote. I have to have him back on the show too. I hadn't heard that quote. That's pretty potent. And again, you know, I'm not saying that I'm not asking people to agree with me, or even saying that I 100% agree with that. It's just, it rips me out of my contextual anchors. I actually do agree with that quote, but I don't know that that is who we have to be in the future. But please continue. So where I've gotten to on that is, is that the surplus story back, you know, thousands and thousands of years ago, while true, sort of like the US being energy independent or a net energy exporter, it doesn't completely hold up when you look at it. And, and we've talked about before that, I mean, you know, the reality is, is that the lives of most farmers back 5,000, 6,000, 7,000 years ago, wasn't too great. It was, it was a pretty darn hard life. You had good years, you had bad years, but it was far from stable. And, and Luke Kemp was on your, your platform twice. And he said a lot of things that some of which I agreed with, and some of which I didn't. But I think the, the thing that he, he pointed out that I most valued and appreciated was his concept of, of lootable surplus, lootable supply. Yeah, that was, that was, that was a good one. And, and I would take it a step further and say that it wasn't so much that you know, that what I have was lootable by my city state or my elite, but that, but that war made entire polities lootable. That the principal method of economic growth for the last 5,000 or 6,000 years has been looting, has been appropriating what other states have through warfare. And so we talk about you and I and, you know, some of our colleagues, we talk about, you know, group, group selection and all these kind of, you know, nice sounding discussions about cooperation, but you know, cooperation with whom? Yeah. I mean, I've heard you ask a number of experts on this show. Well, you know, what would happen if there were an alien invasion? You know, wouldn't that somehow unite humanity? I think all of them have told you, no, Nate, that's not going to happen. Not that the aliens are not going to happen. But no, that's not the way it works. But I'm kind of with you on that. But here's, so what happens is that people cooperate within their polity, within their state, because they want to survive and they want to get ahead. But I think the point that Turchin has really gotten me to think about is that, is that cities came together because people needed protection. I mean, you've talked in a few of your franklies about soft feudalism recently. Well, I mean, a city is nothing more than a castle with a bunch of serfs around it that got big. And so when humans mastered the horse and got good enough with metallurgy to make bronze weapons, you put a guy on a horse with a bronze and later an iron weapon, and man, that's going to disrupt the hell out of your civilization, and you're going to need protection, and you're going to move into a castle when they come and eventually into a city. And if you're, I mean, so war, to take Luke's idea, I mean, war elevated looting to scale. And it begs the question, are we, can we be more than killer apes going forward? And again, this gets back to the Dark Triad episode and the frankly I did after that, humans are better than we think, but humanity is not. Humanity is what we see unfolding in Hormuz and Israel and the US and Iran and Russia and China and all the things. And it does rhyme with what you just said. And in a wide boundary sense, we look at human wars, World War I, World War II, the various wars but in a wide boundary sense, all of it is a war against nature, especially the last couple centuries is humanity as a whole versus the stability of the Holocene and the functioning ecosystems of planet Earth. So yeah, those are deep observations, Art. So moving to the end of the book or near the end and reading the chapter on fossil fuels and the industrial revolution, the story that I like is, oh, well, you know, we greatly increased our productivity because we had much higher energy density fuels. And so we could do a lot more and that expanded the economy and, you know, at least some of us got more prosperous, etc., etc. But following on what you just noted, what fossil fuels really powered was war. I mean, the wars of the 20th century were industrial scale enterprises. And as one example, they're cutting flights in Europe because the jet fuel has to be used for the US military in the Middle East and they're not shipping it to European nations as one tiny example. And that brings us, I think, almost full circle to our brief discussion about AI because I believe, and I think you probably agree, that for all the, you know, the warm and fuzzy things that we might say about AI, it's going to find us more oil or cure disease or, you know, God knows what else. AI is fundamentally a military tool, surveillance and weapons. I don't like to hear myself say that, but I mean, that is kind of what it is. I mean, I think I created a map in one of my posts not too long ago that just shows where all the data centers of the world are. And it won't surprise you to know that the biggest cluster in the world is right around Washington, DC. And that's not because people in Washington, DC are worrying about, you know, medical breakthroughs. Right. I mean, that's just that's just not the way it's going to work. So, you know, I don't want, and I guess the final thing that I want to say on that is that if there is a disturbing message to take from the Iran War, it is that warfare has changed. Drone warfare has completely disrupted the way that we think about things and the war that we're talking about right now, in a way, can be seen, I think, as, you know, maybe the last gasp of the old order, you know, fighting with aircraft carriers and jet fighters and all of these things. And on the other side, you got a bunch of guys, you know, with with little joysticks and, you know, flying drones and ASBMs and all this kind of crazy stuff. So we're in a different world now. We're approaching time limits here, but I have so many more questions. I mean, just on that, you've seen further and further attacks into Russia and Putin is under incredible pressure to retaliate. And Russia also has a lot of energy, and that is part of the mix here. And the Ukraine-Russia thing is four years on, still unfolding. And it's because what you said, drones have changed the game board. Allow me, as your friend and colleague, to answer my last question for you. What have you changed your mind about since your last appearance on TGS? Yeah, you just gave a big epic answer, but you've become a lot more philosophical and you send me quotes every couple days from Alfred North-Weithed and you read McGill-Christ and you're becoming a little bit of a philosopher, in addition to a geologist and petroleum expert. And it's the softer side of Arthur Berman. And I appreciate it. Well, thanks for that. And I probably would not have given as a concise an answer because I'm incapable of it, but I agree with that. And I guess the, you know, the where I will leave it is the philosophical, metaphysical side of me does not despair, even though what we're talking about is incredibly gloomy and even depressing. Because what I take from all of that is that, you know, we humans have a remarkable capacity to surprise the hell out of ourselves and almost, you know, spontaneously change the way we see things. When things get dark, that's when things can change. That's when humans can be our best humans, I think. And if war forces us to do that, I'm not in favor of war, obviously, but whatever puts us there, I think is on balance. I want to say a good thing because there's a lot of suffering and a lot of pain that goes along with it. But change is not easy and it's not, and it is painful. But change is what is needed. And getting people's attention is what is needed. Final question, Art, if you had to give someone listening to this conversation one thing to do or to watch for as this all unfolds later this year, what might that be? That's a very difficult question to answer. I would watch for what Simon Montefiore calls you know, a momentous shift. That I think that, you know, my sense, and this is not data driven, it's just a sense, is that people around the world are kind of, we've reached a limit of how much we're willing to be lied to about, how much we're willing to be played, and how far we're willing to go. Now that's going to translate very differently in a lot of different situations. And that can very easily be taken as, oh my god, you know, it's mass disorder. That's what's going to result. But again, I mean, when people get to reach their limit, you know, that's when real change can occur. And so that's what I'm looking for. I'm looking for, you know, for, I mean, and I don't have a political, you know, dog in this fight or race, as we say in Texas, you know, I don't know that much about Orban. But okay, you know, here's a guy who all of a sudden one day he's out. It doesn't mean Hungary is, you know, is utopia. But something happened over there. Okay. And net that that's, I think that's kind of a good thing. And so I'm watching for, you know, for when it is that all of these patterns and trends that people talk about, and and Turcin is one of the best, you know, about his elite overproduction and all of that. But, you know, when do we actually see that translated into action? And I'm looking for that. Art Berman, thank you for your time today and for your continued yeoman's work week in week out, trying to make sense of the global more than human predicament. And it's good to see you, my friend. Likewise, Nate, thanks for having me on again. If you'd like to learn more about this episode, please visit the great simplification.com for references and show notes. From there, you can also join our Hilo community and subscribe to our sub stack newsletter. This show is hosted by me, Nate Hagens, edited by no troublemakers media and produced by Misty Stinnett and Lizzie Siriani. Our production team also includes Leslie Batloots, Brady Hyen, Julia Maxwell, Gabriella Slayman, and Grace Brunfield. Thank you for listening, and we'll see you on the next episode.