Why Energy May Be the Best Investment of the Next Decade with Wil VanLoh

Hi, it's Tony Robbins, and welcome to the Holy Grail of Investing podcast. Energy makes the world go around. It's got the best risk-adjusted return of any major asset class globally. In this episode, my co-host sits down with Will Van Lo, the founder of Quantum Capital Group and one of the most successful energy investors of the last few decades. The US shale revolution is going to peak very soon.

We got used to this immediate turn-on of production whenever we feel like it.

Firms like ours made exceptional returns during that time period, but it was because we had—

Wow.

How do you make sure that It's a good investment of your capital.

I've got two answers to that.

It's about real commodities, real property.

It's basically subsidized every other sector, and that is coming to an end.

What do you think that looks like over the next 5 to 10 years?

This is a huge point that hopefully the listeners will think about hard. Will's a friend, and he's been at the forefront of energy investing for years. In this powerful conversation, He kind of separates fact from fiction when it comes to the future of energy. In fact, you'll hear his insights on where the industry is headed, what an abundant energy future really requires, and how to think strategically in a space that affects everyone on the planet. You're gonna love this one. So let's jump in.

So welcome to the Holy Grail of Investing Podcast with Tony Robbins and Christopher Zurcher. We are very excited today to have Will Van Loew from Quantum Capital Group as our guest. And I'm honored to be joined by one of our partners, Mark Waid. And we're gonna have a very interesting conversation with Will today. So, Will, thank you for joining us. We really appreciate you being here.

Great to be with you all.

So let's just kind of get started with a little bit of backstory. I mean, one of the most interesting things about people in our industry is how they got from where they were to where they are today. So give us a little bit about your origin story and kind of just take us through how you got to where you are.

Yeah, sure. No, I, I grew up in a very small town in central Texas and really didn't know anything about energy. Actually just knew I wanted to go to college one day and play football. And what started out I thought was going to be a promising college career in football ended pretty abruptly. And when I got injured, and so I was always an entrepreneur though. And I loved, you know, when I was a kid, I started a lot of lawn mowing businesses and ended up having to kind of put myself through college, starting a number of businesses, window washing businesses, advertising businesses, Greek telephone directory businesses. And so it was always just very kind kind of interested in business and very entrepreneurial and how I thought about trying to create businesses. And you know, I was real fortunate. I took a course at TCU in value investing and I had this great professor that was a big Ben Graham and David Dodd disciple himself. And I'd say that's kind of where I really started to to think about a career in investing after taking that course. And so, yeah, that kind of got me started.

And of course, it's funny to interrupt you just briefly. I didn't know we actually had that in common. I started when I was 12 years old running the concession stand at Briar Grove Pool in Houston, Texas. So we have that very commonality. So you got involved in TCU, you took a class, you said, hey, this is kind of interesting and kind of fun, but obviously you're, you're like a lot of people in that you started pretty young. So take us through how you went from TCU to actually starting, you know, Quantum at a very young age.

Yeah, so, uh, well, I, I kind of, um, realized that probably the best way to, uh, get into the investing world— of course, it was, you know, especially private capital back then was a, was a really pretty small industry back in the early, uh, late '80s and early 1990s. And so, um, So really it was, uh, I, I, I, I'm starting out in investment banking, was able to get a job, uh, on Wall Street, um, and, uh, ended up with a, a, a investment bank, um, called Kidder Peabody and, uh, in the energy group there. Um, and I got in the energy group because that was the group they hired for if you were gonna be in Texas. And, uh, and that's kind of how I, I kind of just, I, I started learning about energy there at, uh, Kidder and, and, uh, met some people in the private equity world, um, and pretty quickly realized that my entrepreneurial passions kind of collided with, uh, wanting to go out and become a principal investor as opposed to just an intermediary working at, uh, you know, working in an investment bank my whole life.

So you, you did, you did the banking route and then you decided to start Quantum. But I mean, you know, you did that at a very, very, very young age. So, you know, was there somebody that really kind of pushed you, that kind of took you from just being a student to all of becoming a junior banker to all of a sudden saying, you know what, I can do this actually on my own?

Yeah, I wouldn't say anybody pushed me. I think I just, you know, as a kid, I watched my mom try to become an entrepreneur and she tried to start a clothing business and she really started for all the wrong reasons, right? She started because she wanted to have clothes for her kids and the business failed miserably. But I always admired her for taking that risk and trying. And of course, I was, you know, very entrepreneurial myself. And so I've always just had this, this strong, strong attraction drawn to people that were entrepreneurs, that were calculated risk takers. And, and I just realized that, you know, when I started looking at the private equity space in energy back in 1993 is when I first really started looking at it hard. I realized a couple of things. I realized that there was, there was not a lot of capital in the space focused on it. I realized there were some really extraordinary entrepreneurs in the space. And I kind of guess, you know, I didn't know what I didn't know back then because I was so young. And I just said, look, I'm going to— I want to go get in this. I know I couldn't go raise a private equity fund at the ripe age of 23. So, so the kind of the step to that was let's go build a track record. By, you know, raising money for companies and then reinvesting our fees back into those deals.

But that's really, you know, I guess so is 28 considered to be a ripe old age now? Is that, is that, is that what you're trying to say?

I guess. And I guess it was. Yeah, because I started, I started Windrock, an investment banking firm that specialized in raising capital and doing M&A for energy entrepreneurs when I was basically just before I turned 24. And then I started Corner when I was 28.

So did I correctly hear a story that one of your first investors had to rent a car for you when you were going on meetings?

Yeah, unfortunately that's true. We were in New York and you had to be 25 to rent a car. And I was taking these two entrepreneurs to a meeting up in Connecticut. I don't know why we weren't on the train, but and I had to come back to the hotel and tell them they wouldn't let me rent a car. And they asked why. And I said, I'm not 25. And I think they thought I was in my early 30s.

It was— that sounds like there's a good story behind that. What, what, what is it about the energy business that, that attracted you in the first place? Why did you want to get involved in that sector specifically? I mean, banking, you can go do a lot of different things. Why, why the energy business?

Well, you know, I mean, obviously I knew energy. I mean, that's what, you know, my first job out of school in investment banking was in energy. When I started Windrock Capital, that was focused on energy. So I'd built, you know, over a 5 or 6 year period of time, a real expertise in energy. But I think what I saw back in, and it was really 1997 was the year that I said, let's go, let's go raise our own fund. As opposed to just being an intermediary and, you know, placing capital for entrepreneurs in other people's spots. And I think what I saw back then was a couple of things. I saw a massively underserved market, right? So if you go back in time, the energy industry, oil and gas collapsed in the mid-'80s, prices collapsed, and then the industry collapsed. And like from the mid-'80s to the mid-'90s, when I started doing investment banking, started WindRock, 90% of the companies that were in business a decade before had gone out of business. And so I saw this, okay, the companies though that were left were really, really good at something. They had a competitive advantage. And as an entrepreneur, as a business builder, that's what we're always looking for. We're looking for companies that have some competitive advantage that enables them to differentiate themselves from other people. And so, and it was an industry that had been starved for capital for over a decade. So huge need for capital. Great entrepreneurs left, and very few people were providing that capital. So I saw this great underserved market, and then I saw an opportunity to go out and do what I loved to do, which was basically solve problems, work with really, really smart people and build businesses. And along the way, you know, I think this, once I started realizing that the investors in these privately backed companies weren't the private equity funds themselves, They were actually big pension funds that were investing the retirement savings for teachers and firemen and for public servants. And for me, that's something, my parents always instilled this value of servant, being a servant, helping other people. And that the thought of being able to take those hard-earned savings of investors and do something really good with them, get 'em not only good return, but also, you know, invest in a sector, energy, that candidly, it's truly one of the most important sectors to humanity in the world. I mean, energy makes the world go around. And so I guess it was a combination of all those things that just kind of came together in my mind and really gave me the, I'd say, the inspiration and the drive to go out and just, let's go for it. Let's go try this.

You know, it's interesting to listen to what you're saying. There's a lot of correlations to today where it's a capital-starved industry. It's kind of an underserved market. You know, there's still tremendous technology advancements, et cetera. But, you know, it's still just as important today to have energy as it was then. So it's kind of fascinating when we think about, you know, the energy industry and as we see it, you know, at this time, how do you see it compare to the early part of your careers? It is as corollary as it sounds? Yeah, it's—

Chris, it's remarkable the similarities on where we sit today, uh, and where we were back in the, you know, the early and mid-1990s. Um, it's, it's almost like things have gone, gone full circle. Um, and so, you know, I guess when I think about the, the industry sector today, I'm going to speak specifically about oil and gas first, and then we'll talk about energy more broadly because, as you know, there's a lot of forms of energy. But in the area where we spend most of our time in capital, oil and gas, and in midstream, which is associated with oil and gas, you know, when you stand back and you just look at that sector today, in our opinion, it's got the best risk-adjusted returns of any major asset class globally. So the ability to invest a dollar with a given set of risk and what that dollar can turn into, you know, when I look around the world today and think about things that we're doing in our family office, for example, you know, I don't see another sector that has as good of risk-adjusted return proposition in it. And so, you know, I start with that and, you know, there's the same thing is, you know, like in our business in terms of competing capital, probably over 80% of the private equity that was available to invest in the space 5 to 6 years ago, kind of pre-COVID, is gone today, right? LPs quit putting capital in this partly because the returns were pretty poor, but also because of ESG. And, and so there was a mass exodus of capital. And yet the fundamentals behind the business today are probably better than they've ever been in terms of demand for energy. You know, billions of people moving from kind of third world status into second world and the first world status, moving up the economic food chain. And so that the demand for energy just from population growth and the mobility of people up the economic ladder coupled with this incredible tool that humanity is now trying to figure out how it's going to use, known as AI, that is a massive, massive consumer of energy. You kind of look at the trends, you look at the fundamentals, the value proposition, and it's just an extraordinary place to be thinking about how to put capital in today.

I'm going to make a comment to the audience real quickly, and then we're going to come back and kind of double-click on what you just said. You know, one of the things that's always a risk when you have somebody who's a sector specialist is that in many times, you know, they're a hammer and everything looks like a nail. So they're just like, you know, oh, you know, they're just talking their book. They're just saying whatever it is that's gonna get you to be excited about their sector. The realities are that I think if people are just, you know, intellectually honest and just look at what's happening in the world's population and look at the amount of growth that we have as a consumer of energy nationwide and worldwide, you know, it's just irrefutable. The amount of demand that is going to be there. And AI is obviously part of it. But let's talk about how AI actually is going to potentially help solve for much of what we're trying to do in the world of energy right now. How is it being— it's a consumer of energy, but it's also a productive way in order to be able to do energy better. So talk about how AI is being used to do that.

Yeah, no, it's a, it's a great point. And I think just like every sector AI is going to have a profound impact on how businesses are run, how they're built, how humans will, you know, the role humans will play in those businesses. Specifically in oil and gas, I think there's a number of areas where AI is making, and it's really, we're really in the first inning. So I want to kind of emphasize that, you know, we've got a lot further to go as an industry. But if you think about it, very simply stated, you know, machine learning is just based basically statistics on steroids, right? It's, it's basically being able to run multivariable analysis at a scale and at a speed that humans just can't do, you know, with, with a regular computer. So, and, and so that's, you know, you start there, that, that's really what it is. And so the more variables that come into play, for the success of an industry or a sector, the more potential value I believe AI can add to that. And so when you take something like oil and gas and you realize, you know, you look at the incredible, um, shale revolution that we've had going in this country for the last roughly 20 years, took America from the most, uh, energy, uh, uh, uh, dependent country in the world to the most energy independent country in the world that was all made available by technology that basically unlocked a reservoir that for the prior 100+ years industry just said that rock is not porous enough, it's not permeable enough, we can't get the hydrocarbons out. And then all of a sudden this thing called horizontal drilling and hydraulic fracturing came along and enabled us to unlock that rock. But the number of variables You know, where you land the lateral, for example, in the reservoir, how you complete that lateral, how much sand you pump, how much water do you pump, how fast do you pump it, where specifically do you change it? You know, do you change different every stage of— how many stages of fracs, how many clusters per stage? There's all these variables, all these knobs, if you will, that you can turn up or down. And every one of those times, every time you turn that knob up or down, you're getting a different effect in that reservoir. And so what technology, what machine learning has enabled us to do is basically optimize the recoverability of a given reservoir and minimize the cost at which you recover those hydrocarbons. Right. So, you know, you're not doing things that are wasteful. You're doing things that are most important things and you're doing those things in the right order, in the right amounts., and that is unlocking— it's basically making energy much more plentiful and much cheaper for humanity. Um, and so that's just one way. I mean, I could go through a lot of examples, but there's so much data, you know, AI and machine learning work the more data you have. And so energy does generate the, the, the, the development of, of energy, particularly oil and gas, generates massive quantities of data. And because of that, if you, if you really understand data science and how to, how to capture that data, you got, you got to capture the data. You have to, you have to make sure it's clean. And then you have to be able to have it in a platform and a system that you can run, you know, this, this analysis. And so it's a lot harder done than it is said. But, but, but the industry is in the first, maybe the beginning of the second inning of really applying this. At scale to, to, you know, meaningfully increase the availability of energy and drive down the cost of energy.

Well, you know, I think that's an interesting comment that you say the industry as a whole is only in the first or second inning, but I know you guys have been doing this for a while. You guys have been building a data reservoir. You've been, you've been hiring individuals who have a technical background in this. So maybe explain to the audience how you guys have, have been focused on this space for many years now and, and how it impacts the decisions that you guys make every day.

Yeah. Well, when I started Corum in 1988, we had a novel model and our model was we're going to have a lot of technical and operating professionals in-house to sit side by side with the investment professionals because the industry is so technically and operationally driven. Okay. And that shouldn't have been novel. You know, if you look at the Silicon Valley model, for example, and that's actually where I got it from is looking at some of my friends that went to Silicon Valley and working for the venture firms. And I looked at how they staff their investment teams. And I couldn't believe that the investors in the oil and gas space didn't staff their teams similarly. And so from day one, we had a lot of engineers, geologists, geophysicists, over time added petrophysicists, added data scientists. And so from day one, we were always set up as a firm that was very data-driven. And that, you know, decades later became a massive competitive advantage for us because we had always kept that data right now. The early data was in analog form. We had to ultimately digitize that and get it into a form that we could actually— a computer could use it. But we started collecting digital data a decade plus before anybody else really, certainly in the private capital space for energy, did. And so we had this massive database, if you will. And then we're also— we've grown over time to become you know, we're the largest driller in North America. So we've got roughly today about 65 rigs running across mainly the US, and that's, you know, probably 12 or 13% of all the rigs running. And so in order for data science to work, you have to have a lot of data, right? That's why like the old world was big data is what they used to call it. And you have to have clean data. Well, the problem is a lot of the data in the public is very dirty. Like it's amalgamated, it's aggregated, it's not cleaned up. It's, they don't, they don't actually have direct data. So they use a lot of algorithms to kind of allocate production to wells. And so those of us that have a lot of proprietary data can really clean up, use that to tune, if you will, the public data that we get, because we all buy— we can all buy the same public data, but no one has access to their private data other than themselves. And so we very quickly realized that we were sitting on a kind of a goldmine, if you will, of data.. And, but we needed to have, you know, as technically driven as we were, our engineers and geos, they didn't really know how to use data science tools, right? They were not, you know, they weren't programmers, they weren't software engineers, they weren't data scientists. And so, so we ended up hiring a gentleman out of Chevron that was actually running their kind of their, it was kind of their global digital architect that kind of really helped write their plan for Chevron's digital transformation. So he had been somewhere that got to spend billions of dollars kind of figuring out how to do it and making a lot of mistakes on someone else's money. And I think when he saw the platform that we had, it was a very easy decision for him to come over here. And since then, we've got an internal team of about 15 data scientists and programmers, software engineers, and then we have about another, and this is so, So our total investment team is about 75 people, if you will. So 15 of those come from the data side, but we have about another 30 to 40 full-time contractors in India working for us full-time as well. So the data's— I mean, if you really look at it truthfully, data science is probably the biggest single discipline, uh, within our firm today.

Yeah, it's, it's fascinating because so much of— yeah, everybody's trying to figure out how to do this. Everybody's trying to figure out, okay, I'm going to go hire a bunch of people, I'm gonna figure out what the data says, and I'm gonna figure out how it's gonna make me a whole bunch of money. But trying to actually quantify how much return on investment there is is really tough. Have y'all been able to, and I'm obviously not asking anything too specific to your business, but have you been able to figure out a way to say, okay, we spent this much last year and we believe that this was our ROI? And if so, how, just generally, do you metric that in order to make sure that it's a good investment of your capital as opposed to just an interesting thing to pursue?

Yeah. So I've got two answers to that. The first one is going to be kind of a direct answer. The second one is going to be kind of a derivative answer. So directly, absolutely. I believe you have to measure that, right? Spending money for the sake of spending money is not a smart strategy. And so, so you got to, you got to figure out a way to kind of try to articulate, you know, directly, like if we spend a dollar on this, what, how much return are we getting? And so there's a lot of projects that we're implementing within our portfolio companies where, you know, we're, we're tracking all the cost of actually developing the, the data science application for that. And then we measure the ultimate outcome of that in terms of truly like either cost saved or incremental revenue generated. Okay. And so we, we track all of that and we can absolutely articulate a very, very healthy return on investment just from that alone. But I think the bigger, the bigger value add is really how it transforms everything about how we think about investing. It puts better data at the fingertips of our investment team so that when we're trying to decide where we're going to go from a business development standpoint, we spend our time a lot more intelligently because we're focused in areas where we see opportunity that we're deriving insights based on our data science analysis of all the basins in North America. So our, so our BD efforts are much more targeted. We end up with deals that have likely much more, much better risk-adjusted returns, much more upside. When we, when we actually go into an area and start buying things, we've got superior data in terms of the assets that we're buying, what can we do with those assets? So what that enables us to do is we probably— we are able to kind of punt, move on from deals sooner that aren't going to pencil out. And we're able to more accurately, I would say, value a given asset because oftentimes in our industry, the— if you just look at the actual data from the last 2 or 3 years of drilling, If you had a bad operator, you might get bad results, not because the rock was bad, but because the— there was human error. And so data science enables us to go in and look at an asset and says, was that asset poor performer because of human error or because of bad rock? And most people will just assume it's because of bad rock. And so what this gives us the ability to do is find assets that actually do have more upside in them than it's apparent from what the public data would tell you.. And so we can make sure we really get those assets. But conversely, a lot of times the public data's bad the other way. And, and, and, and there's things that operators can do to kind of juice production up, right? And so it looks like this, this productivity is reservoir's way better than it actually is. And we're able to go in and look at through a whole system of analysis and attributes, uh, we can say, hey, this artif— this, this production was artificially being kind of accelerated. And if we buy based on that decline curve and that production profile, we're going to way overpay. So a lot of times it's the deals that it keeps us from doing that, you know, you can't really articulate a value. You know, the value is, is we just may have kept from losing hundreds of millions of dollars. But that's something, and, and that's as a, as a CEO and as a, as a, as a, as a leader and a capital allocator, you have to get comfortable that it's not always just tangible. I put a dollar in and I made $2 over here. But oftentimes it's also things that it keeps you from doing that you can't even really put a direct dollar value on. But as an investor, you know, you, you, you may have made more money doing that than any other application that you're applying the data science to.

Yeah, I feel like, I feel like so much of investing is just accurately pricing risk, right? And you think about the tools that are available today to price risk, and so much of that's driven by information. And I wonder, I wonder how now thinking in the position you're in and the position your firm is in, you know, how much more efficiently you price these risks compared to even 5 to 10 years ago. You know, there's— it's changed quite a bit. You know, maybe pivoting a little bit, what has happened over the last couple of years in the energy industry that maybe you didn't expect or something that has come in in a way— doesn't necessarily have to be a bad thing. It can be a good thing, but something that is unexpected or a change in sentiment or or a focus area that you didn't think that you would have that all of a sudden now is a lot more interesting because of what factors?

Yeah, so, you know, one of the things I learned a long time ago is don't ever underestimate the power of technology, right, to solve problems. It usually maybe takes a little longer, costs a little bit more than you initially thought, but oftentimes technology will solve problems you didn't even know were problems or things you didn't even think were solvable. And so, I think one of the biggest things is just the impact of technology and look no further than what we're talking about, you know, just we've been talking about the last 5 minutes, which is AI and the impact that that's the capability, the impact that has on our sector. As you said, much better identify risk, price risk, and then ultimately manage risk. I mean, that is our job as investors to do those 3 things. Really well every day. And so I was very excited about the potential of machine learning and AI early on, but I have been, and as hard as we've leaned into it and I've pushed our organization to be a first mover in the space, I've even meaningfully underestimated the impact that it's going to have on our business. So I think that's one area. Related to that, because of AI and this massive now build-out that we're seeing, globally with data centers. It's this AI arms race, if you will. The need for energy is growing at a rate that's much greater than any of us anticipated just a few years ago. So I'd say that's another kind of unexpected. And then the third I'd say was just this whole, you know, 6 or 7 years ago, it was about oil, it was about gas, it was about coal. Then all of a sudden, renewables kind of came onto the scene at scale. And everybody, you know, 5 years ago said oil, you know, the energy transition is on and oil and gas and coal are going away, right? Now, we never believed that. I mean, if you understand energy systems and how long they take and energy transitions, you know, really take, you know, 50, 75, 100 years, not 5 or 10 years. But the world believed that we were going to transition away from hydrocarbons pretty quickly. On the way to net zero. And I think while that was frustrating for those of us in the oil and gas space, because we knew the truth and we knew the world was deceiving itself and there's great cost to doing that, I guess I didn't expect the world to swing back the other way so quickly. And that's partly driven by obviously the change of the administration in the US, but in Europe in particular, where I'd say it was much more pronounced, you know, this move away from hydrocarbons. This big push on ESG was so pronounced. And in this whole, you know, Russia-Ukraine war changed everything. And all of a sudden, the Europeans' energy costs skyrocketed. They start having to look a lot harder. What is the cost of the energy transition? And now the fact they've got to rearm themselves and spend, you know, hundreds of billions of euros, if not a trillion euros a year as a continent to rearm themselves. Now, given where the US appears to be headed, I think that whole debate around energy transitions, wind, solar, nuclear, nuclear is now coming on really strong. Was hoping for that. I wouldn't say necessarily expect it. I think a lot of things have happened with the tech sector now getting behind nuclear. Society is now getting behind nuclear, which is, by the way, the absolute best answer. It's the cleanest, most dense form of energy. In the universe. So all these things are kind of coming together very rapidly, massively changing dynamic and landscape in the energy space. Makes it really exciting, but it also makes it, you know, there's lots of landmines out there too. You got to be careful of anytime things change this much, this quickly. It creates phenomenal opportunity to invest, but also creates phenomenal opportunity to destroy capital.

Where's the middle ground there, right? You got these pendulums swinging back and forth. I feel like, you know, 5 years ago it was We're not gonna need oil again. And today now it's swung back the other direction. Where do you find the middle ground where you feel very confident again pricing that risk to say, all right, this is the right kind of opportunity we want to pursue? 'Cause you guys invest across that whole landscape, right? I mean, you do not, I don't wanna say all of it 'cause all is an encompassing word, but you're active in many different areas of the energy sector. So like what, where's that middle ground that you guys wanna live in?

Well, you know, we've always espoused an all-of-the-above strategy, right? I mean, if you, if you study history, and, and, and I think all good investors are, are, are very critical students of history and really understand history, um, you realize that energy transitions, we, we've never, we've never replaced any form of energy in modern history in the last 180 years. We've never, we use more today of all forms of energy than we've ever used before. Um, and, and that will continue for, for many decades to come. Okay, so you, you start with that, and I'm a big, big believer as an investor in kind of mean reversion, right? When, when things get too far out of whack one way or the other, capitalism has this amazing ability to correct itself. And so, um, the, the, the fact is we will— we, we added a new form of energy, and that was wind and solar, you know, here over the last 15 years, and that will continue to grow and, and, and gain market share. But all these other forms of energy will be used for a very, very long time. And so you, you can't go in with kind of predetermined outcomes as an investor because if you do, you're going to mess up really, really poorly. And so we look at it as is we're agnostic where we're going to invest. We, we've built the capability in-house to be able to invest really intelligently in oil and gas or midstream or wind and solar, working on building that capability in nuclear. Um, but you know, we, we understand whether it's thermal power or renewable power or it's, uh, battery storage, we, we, we have a core competency in those areas. And we look at it as every dollar of our capital, we're stewards of our investors' capital. So our job as stewards is to find the best risk-adjusted returns that we can find for them. Not to say we have a social agenda, we're gonna, we're gonna deemphasize Hydrocarbons, we're going to emphasize renewables, um, or, uh, you know, whatever. We have an ESG identity. It's all about return and risk. And so every day we wake up scanning the globe trying to figure out where are the best risk-adjusted returns. And even though we're doing a lot in wind and solar, uh, and renewables, um, by far and large, the, the best risk-adjusted returns today are still in the traditional oil and gas and midstream space. And that's why the vast amount of our capital has and will continue to go in that space until such time as we see that opportunity set shift. And, and when it does, we'll be very adept at, you know, changing our approach as well.

You know, you, you made the comment the pendulum is swinging, and particularly in Europe, they're recognizing that, you know, they went a little too far. But it's interesting because there's so few players in the industry now that are actually managing institutional capital in the traditional oil and gas space. Are you beginning to see any change in that attitude as far as people saying, okay, we recognize that we kind of abandoned the space maybe a little too much and we're willing to come back to it? Or is it just like, okay, we recognize that we need to be more open to it, but we're going to let somebody else put up the money itself?

Right. Um, I, I think in, in the US, we started to see that pendulum swing back. I mean, literally, probably, you know, a year ago now. And it started slowly, and it's picked up a lot of steam. And then when Trump got elected, it took off. Um, but, uh, so I would say in the US, the, the, the, the institutional investor universe, um, was not near as quick to just throw in the towel as they were in Europe. In Europe, it was a categorical rejection of hydrocarbons, right? And, and it was driven by a lot of, you know, just fear that the world's going to come in if we don't do this and get to net zero by 2050. Um, a lot of political, a lot of social agendas. And it was— you were, you were shamed in Europe if, if you even thought about investing in hydrocarbons. Interestingly enough, we lost every one of our institutional investors in Europe in our last fundraise that we closed last fall. But our European wealthy families, the, the ultra-high net worth families invest with us, most of them doubled or tripled their investment in the space. In the US, a lot of them just said, hey, we're unsure. We're not saying no forever. And these are institutions. But a lot of them said, we're, we're going to take a wait-and-see approach. And now those ones that said we're going to take a wait-and-see approach are now really starting to look at it hard again. And there was a small number, you know, probably a third to 40% of the investor base in the US that said, hey, we see the opportunity and we actually think oil and gas is really good for the world. It has done a lot more good than bad. And we're going to lean in not only because it's the right thing to do, but the risk-adjusted returns are off the charts. And so, but I think that now that in the US anyway, we're starting to see a lot of those LPs at '21, '22, '23 were like, we're not sure, we're not going to do anything right now, are starting to actively look into space.

But well, that actually builds upon an interesting topical situation, which is that, you know, we've seen people now starting to say with, you know, quote unquote drill baby drill, that it's good, the pendulum is going to swing way too far the other way. There's going to be all this money that rushes into the space and lo and behold, we're going to have prices plummet because of that. And everybody is just going to be completely wrong again. In that regard. So talk about, you know, I don't think people realize how slowly these, these things move and how long it takes to be able to get capital projects done, et cetera. But just talk through that. I mean, overcome that objection, if you will, of somebody saying, well, now I've missed the boat, it's too late.

Right. Yeah. Look, I'll be the first one to say, if you're a student of history, you realize all markets ultimately, you know, go overdo it both ways over time. So, Will there be a point at some time in the future where maybe too much money is focused on the space? It's certainly a possibility because that's happened. That's candidly happened in every sector all the time. You got to, you got to be pretty adept at understanding cycles. But these cycles are very long-term cycles, to your point, right? The cycle time for an oil and gas project globally is about 7 to 8 years from first dollar of exploration to first production. Shells, totally different. But the US shale revolution is going to peak very soon, and there's really not another shale revolution we believe will happen globally. So we're back to conventional assets again globally to, to, to find the resource, and that's going to take a really long time. And then you got to realize we've, we've underinvested in the space for a decade, and we've underinvested by about $350 to $400 billion a year. So we've now got this global deficit of $3.5 to $4 trillion, that we're just starting to see the effects of that. If you look at, um, a very simple metric to kind of measure, are we replacing, if you will, the, the resource that we're, we're producing? Um, realizing that, you know, 7, 8-year cycle time, so a dollar invested today is not going to show up in production for 7 or 8 years. And, and, and if you look at it, the, the reserve replacement ratios globally since World War II up until the '90s averaged about 200%, over 200%. Okay. So we found 2 barrels of oil or 2 MCF of gas for every barrel or MCF that we produced in the '90s after the crash in the '80s that dropped below 100%. It came back up above 100% in the 2000s, first decade of the 2000s, dropped back below 100% in the 2010s. The last 5 years it's been 9%. Okay.

9.

9. Anybody that understands this stuff should be alarmed. That, that is a big alarm bell because we have, you know, the lowest it's ever been was about 60% in any decade. And, and, and, and that was actually in the, in the, in the decade of the '90s after this massive price collapse in the '80s and early '90s. And, and it was 9% of the last, the first 5 years of this decade. And so that, that, that speaks to this massive underinvestment that started in 2014. And that, that to me is, is, is, is, is, should be concern for everybody. So, you know, will too much capital rush in? We are nowhere close. We need so much more capital in this space on the private side, especially, you know, the private companies. Accounted for over half of the real shale boom. I mean, if you look at the plays that were discovered, the techniques that were developed and kind of refined to extract this oil and gas, it was private companies that drew a tremendous amount of that innovation, a tremendous amount of that capital deployment. And today that capital, you know, the private sector's got 10 to 15, maybe 20% of the capital it needs. Um, and then the same thing's true in the public world. Like, like, you know, the, the capital flowing into public companies, pretty non-existent today. Um, on, on an equity side, you know, the model's changed. It's all about share buybacks and distribution. So, um, uh, but yeah, that, that, that— I, I don't see, Chris, this being an issue for a very long time.

We, we've— it's really interesting, Will. It's really interesting, Will, because of the fact that when, when the audience is, is listening to this, I can just here because I've heard it so many times from so many different people. They're just not fully connecting the dots that, you know, there's two things that I want to double-click on in relationship to this. The first is that, you know, back in this underinvestment period where we're at the reserve replacement ratio for about a decade was about 60%. It was followed by when we hit $140 in crude oil. Okay. So we had this massive spike in price because of the fact that we had not been investing enough in the space. The first 5 years of this decade at 9%. I, it's, it's frightening to think about if that continued for the next 5 years. Now, I don't think it will, but it just shows you how what, you know, the economic term, the elasticity of, of what we're dealing with here. It could really create a tremendous amount of pricing pressure if we don't invest enough in the space. But the second thing is that people just had this perception. And I hear it all the time. Oh, we can just produce more. It's really easy. Well, no, it's not. It takes a long time to actually get projects together. But the shales did spoil us and we got used to this immediate turn on of production whenever we kind of feel like it. And that was just going to solve everything. Well, I know you said, well, recently, you know, we've kind of hit that peak shale, you know, What do you think that looks like over the next 5 to 10 years and what are the challenges the industry's going to have to overcome?

Yeah, I mean, Chris, this is, this is a huge point that hopefully the listeners will, will really think about hard because I think we've got, you know, we got hooked in this country on, on the shale, the cheap oil and gas that came, came with the shales, right? The United States over the last roughly 15 years has been responsible for almost 100% of the global growth of supply of oil.

Okay.

We've tripled our oil production. We've more than doubled our natural gas production, you know, over that time period. And because of that, OPEC for a period of time lost pricing power. Okay. But OPEC— and when you throw in OPEC+, which includes Russia, you know, OPEC produced about 30 million barrels a day out of about 100 million barrel a day market. Russia about 10 million barrels a day. So you look at 40 million barrels a day they're putting into the global market. They consume some, export most of it. Um, when, when you look at that and, and you have to step back and realize now, if America, who today produces about 22% of global oil supply, who produced 100% of the global growth in oil supply over the last 15 years, no longer can do that, the power has shifted back to OPEC. Okay? And they know that. Russia knows that. Saudi knows that, the UAE knows that. And if you look at the needs, the— if you just look at those countries, they all run their country off the revenue from their— the national— their oil and gas is nationalized effectively, and the governments run off their oil and gas revenue. So if you look at the breakeven price, like what do they need to, to sell a barrel of oil for in order not to have to dip into their sovereign wealth fund or go to the capital markets and issue bonds, it's about $90 to $95 a barrel. And today oil is selling for about $67, $68 a barrel. Okay. And by the way, they'd like it a lot higher than that. That's just what they need to break even. They'd actually like to replenish the coffers that they've been spending down over the last decade plus. And so when you look at that, you say, wow, could oil really rise that much? Well, compare that to every other major expenditure that Americans spend money on. Housing, food, healthcare, education, all those have, you know, say the last 15 years have increased in price by 60 to 80%. Oil's gone down by, you know, half. Gas is down by 75% in terms of its price. And everything else is up 60 to 80%. So just on an inflation-adjusted basis, Candidly, oil could, should be, you know, triple digits. Natural gas could be what it sells for globally, which is about $10 an MBTU, not $3 or what it's averaged here over the last 5 years. And you gotta start to think about what would that mean to the American consumer? One, it's highly inflationary. So you start thinking about your portfolio and inflation protection, but two is this amazing gift that oil and gas has created for America, for every other sector. It's basically subsidized every other sector, allowed those sectors to raise their prices while its prices have come down. And, and that is coming to an end. And that's the, the, the listener needs to understand that that is not sustainable and it's gonna have profound implications for how every other sector is valued, uh, in the S&P. It's gonna have profound geopolitical implications. For our country and for our, for our allies. And so these are big, big things that we need to be thinking about.

I maybe want to take a piggyback on that and tie in this AI conversation and really focus on the power markets, because I know you guys are active there and what all this means for power, because you see power prices going up across the country, around the world. Maybe explain how the demand side of of the power conversation comes in with, with the data center conversation and just people consuming more energy, but with the, the commodity price dynamics that you just described, right? Like, that's a, that's a really interesting kind of confluence of a few rivers.

Yeah. So, um, yeah, let's talk about power. So basically, for the last 15-plus years, uh, until last year, power demand in the United States was flat. I mean, it grew, you know, a couple tenths of a percentage point. So it was just, you know, 0.2%, 0.3%, almost nothing, negligible. Prior to that, power demand was growing, you know, 1 to 2% a year. The projection over the next 5 years is that we're going to basically roughly grow power demand about 20% in aggregate, which is, you know, roughly 2.5% plus to maybe 3% a year. Extraordinary change in trajectory of, of power demand. So all of a sudden everybody's waking up and realizing, okay, we've— what we've done is we've created a very unstable grid in the United States. First of all, we have not invested in upgrading the transmission. And so as these loads change massively, we have a very antiquated, very old transmission system and you can't build very much new transmission. And we've put in a lot of wind and solar. Okay. And wind and solar is great when the wind is blowing and the sun is shining, but that doesn't happen all the time. And so it's not baseload power. It has— it's very volatile in terms of— if you look at the supply, the dispatch curve on it. And so all of a sudden people are looking around in the higher percent that the overall supply stack is made up of renewables, the more unstable the grid is. So you didn't start to have to introducing things like battery storage, right? So that adds a lot of cost. And so what we have now in the United States is we have for the first time in over a decade and a half, we've got demand growing meaningfully. We've got regulatory— we've got basically court bottlenecks and everything gets tied up in the courts. And so you can't really build what you need, takes so much longer. And that regulatory— there was a comment that Alan Armstrong made at CERAWeek. Alan's the CEO of Williams Company. Dave Erickson, one of the largest pipeline gas pipeline companies in the US. And he said they spend $2 on regulatory for every $1 they spend putting in a pipe. Now think about that. Wow. That's crazy. I can guarantee you that's not happening in China or Russia or India. And so the cost on this stuff, the turbines, do you want to get a GE or Siemens turbine today to put in a gas-fired plant? 5 years minimum. Okay, so is that just a function of their manufacturing capacity?

They can't keep up, right?

We've decimated— if you go back, say, the early 2000s when we had the last big build-out of natural gas-fired power in this country, and you look at today, the capacity to, to turn out turbines, we've lost 75% of our effectively manufacturing capacity to be able to do that. Okay, and then by the way, the rest of the world is ordering these turbines, so you know, they're not as focused on net zero by 2050 as we are in the West. And so there's these massive backorders, capacity's down. And so the cost on this stuff where it used to maybe cost a, you know, $1 million per megawatt to build a natural gas-fired facility, that's probably $1,700, $1,800 or $1.7 to $1.8 million per megawatt today. And in some cases as much as $2.5 million. So the cost on this stuff is going up again, very inflationary to the American consumer. And there's really nothing— if there's no drill baby drill, or, you know, we need to be building baby build. And I, and I love that slogan probably as much as anything I've heard recently, because that's— we got to build a bunch of stuff. But when you build a bunch of stuff, unfortunately, you're going to strain all the supply chains. It's going to be highly inflationary. And so existing assets are actually incredibly valuable. It's one of the reasons we bought Cogentrix earlier this year for about $3 billion. We bought a portfolio of 11 natural gas-fired power plants. And if you look at it as a percent of replacement cost, we probably paid less than, you know, of the old replacement cost, $0.50 on the dollar. Right.

And so that's fascinating. And my guess is we're going to hear build, baby, build, you know, a lot of other places than just here. But, you know, The fact that you can buy things for such a fraction of replacement cost, at the same time it's so expensive to build them is really quite remarkable. And what we— I don't think the average person appreciates, and we've been talking about this quite a bit, which is this energy evolution, all the ways in which it's done is going to be inflationary. No matter how you slice it, it's going to strain supply chains. It's going to create inflation. It's one of the reasons we've been in the higher rates for longer camp. But, you know, the find what matters, that's one of our favorite sayings as a firm. You have to find what matters. And what you said is fascinating that most people never fully appreciate. And again, this is, this is a group in case of Quantum and in Kaz that we're investing in all of the above energy. We want to invest in everything as long as it is responsibly sourced, it's clean and it's reliable. But the reliability is the key and makes money. Key, key, key detail for sure. And it's a great ROI. Number one, but it's something to where what you said and the final matters is the more renewables we put into the grid, the less reliable the grid becomes. And so that is something to where we are in a position to where we know that that is going to be a, you know, a, a real interesting balance that we have to do to find more storage, to be able to find more ways to stabilize the grid with that baseload power. And most people just don't fully appreciate that you can't just flip a switch and make this transition.

Yeah. And Chris, I think one of the things, you know, one of the reasons investors soured on the space, you know, roughly almost a decade ago now, but certainly, you know, around COVID time, is there were a lot of— there was a lot of misappropriation of capital, right? The shale boom. There was a lot of money lost in that first decade of the shale revolution. And I think a lot of investors looked at and said, It's just not a good space to invest. And that's actually, that's an overly simplified conclusion to make. It's a very good place to invest. I mean, firms like ours and several others made exceptional returns during that time period, but it was because we had all the requisite skill sets in-house to do what we've talked about several times already on this, on this show, which is identify risk, price risk, and then manage risk. And to do that in oil and gas, you have to have a deep bench of technical, operating, digital professionals, because that's where the risks are. That, that's how you're going to identify them. That's how you're going to price them accordingly and then, and then manage them. And I think that's going to be the danger, you know, if there is one. Um, you know, it's like, be careful about, about where you're putting your capital. Obviously, if you're a public investor, you go find a really good public company, they've got all those skill sets in place, right? In the private world, it's a lot tougher because a lot of generalists tried to go make it in oil and gas, and most of them had a really bad ending because they just didn't understand the risks they were taking. And they woke up one day and they had these massive losses and their, you know, investment committees or board just said, shut it down. Like we're getting killed in this space. And so I do think that's, you know, the survivors. There's 5 or 6 of us out there that have kind of survived this, this big downturn. And there's a reason we survived, right? We really knew the space well. We had the ability to do those things around identifying pricing and, and managing risk.

Well, let's, let's, let's talk about that just a bit on something that ties to everybody in the audience, whether or not they're investing in oil and gas or traditional energy or nontraditional energy, transition energy, it doesn't matter. In everything we do as investors, it's all about identifying talent. So as an allocator of capital to your particular space, what is it that you look for specifically in leadership in someone that you're going to invest in and you're going to back because you believe they're going to be successful, whether they work for your company or they work for a company that you're investing in? What are some of those key traits?

Yeah, well, so there's some key traits, period, in what do we look for in backing companies or people we're going to bring into the firm. I'll hit on those, but then there's a few additional things, and particularly in the leadership of the firms that we invest in. That we're looking for. Same thing we're looking for in kind of the leaders, the partners of our firm. And obviously it all starts with, it should just be a foregone conclusion, but if someone doesn't have an incredibly high level of integrity and a strong moral compass, it just, life is too short, right? There's too many ways that people can screw you if they want to. And so it starts where we are truly looking for people that are just, they're good people. They believe in win-win, not win-lose. Moving past that though, I think there's a couple of things that we really look for in people, especially in the leadership. We're looking for proven capital allocators. And what that means is they can show us how they have basically made money in the past, how they have done those things we just keep talking about, how they, they talk about risk a lot and they talk about how they, how they act and getting into the details, how they actually think about valuing things and therefore pricing risk and how they run their businesses to continuously be monitoring and addressing the risks in their business, right? Because if, as I've heard you say many times, Chris, if you take care of the downside, everything else kind of takes care of itself, right? The upside is nice, but you got to really be worried about the downside. So they're people that are really focused on protecting their downside and they're capital allocators is what we call them. I think the third thing we're looking for in people is a real sense of creativity, right? They've got to be lifetime learners. They've got to be— they got to hold everything kind of loosely in terms of can't be know-it-alls because things are changing so rapidly in our business. So if you're not a lifelong learner, if you're not always saying, hey, What I know today in 5 or 10 years will probably be thought of as, is like dumb. Yeah. Because there'll be a much better way to do it. When you get stuck in your ways, and that's what we see so often is people are successful and they don't want to keep, they don't want to keep changing and learning, and then they get stuck in the past. So we're looking for people that, that are very much lifelong learners, very creative, willing to think about things outside the box. And then I think another attribute is just, we use the word grit around here, and grit can imply several different attributes. You know, one is just really, I'm going to outwork you. I'm going to work harder than you. I'm going to work smarter than you. I'm not going to give up when I get knocked down. I'm going to get up. I'm going to get up and I'm going to try again. You know, that grit, what we find, because anybody that's been in business for very long knows, is every good plan gets laid asunder, right? Once the— it's like in battle, like once the bullets start flying, All plans kind of, kind of get ripped up, and, and you gotta, you gotta have grit. You gotta, you gotta be able to withstand, uh, mentally, um, kind of getting— doing something wrong, losing, uh, uh, and then you got to be able to get back up and dust yourself off and get back on the field and just figure out a better way to do it and, and never give up and never quit. Um, so those are the 3 or 4 things I think that— I mean, there's a whole list of other things that we, we think about when we're hiring people or we're evaluating our management teams. But, you know, when those 3 or 4 things are in place, uh, that's 80% of the battle right there.

You know, the grit conversation is an interesting one, and this may be— maybe we close on a bit of a personal note, but something I learned here today is that the 3 of us share in common is that an injury playing football set all of our lives on an interesting trajectory, right? Well, you talked about, you know, going to TCU and, and, and, and your desire to play football there, and Texas Tech for you, and for me, it was my senior year of high school breaking my leg, which put me on a trajectory towards, you know, going to school that I did and meeting my wife. I'd be curious, maybe for Will and for you, Christopher, like how that, how that moment in time— oftentimes life is so much about like specific moments and how we respond to them. Um, Will, maybe what you start, maybe share, share with the group kind of what that was like for you and, and what you learned from it.

Yeah, I mean, I think it goes to that grit comment, right? I mean, it would have been easy. My dad really didn't have the money to pay for TC. I went there. He said, I'll help you get through your first year. I didn't have a scholarship. So it was like, you know, the guy that was the starting punter was first team All-American and they had one scholarship. They're like, come, if he graduates, if you make the team, you'll get a scholarship. And so unfortunately I never got a shot at that. And so my dad's like, well, look, you need to go to a, come back, go to a state school, go to A&M or UT. And you know, I just, I don't know, there was something in me that said, I don't want to do that. I want to, I'm going to stay here. And, uh, um, and I'm just going to figure it out. Right. And it's that, uh, you know, the old saying that necessity is the mother of invention. I mean, it basically put me in a position where I had to go figure out, you know, how I could make enough money, um, to pay for my tuition and my books and my food and my lodging and everything else. Um, but I, I mean, gosh, you know, I, I wouldn't have traded that for the world. I think so many times in life we all want things just to be great, right? We, we don't, we don't like adversity. We don't like when troubles come our way. But when I look back in my 54, almost 55 years of life, when I've grown the most is when I've gone through the toughest times in my life. I've gone through the biggest adversity and that forges not only your character, but it also, you know, it's kind of your point. It's amazing how you, it just, it sets you on a different path. You end up meeting people. Whether it's your wife or, you know, someone you end up working for. And, and so it's, you know, I think you just got to take life understanding that there's, you're going to have some, some peaks and you have some valleys. You can have some mountaintop experiences. You're going to have some, you know, I'm at the bottom of the ocean experiences. And, you know, if you keep your head about yourself during those times, you learn from it. Being that lifelong learner, have that grit. The most successful people in the world. Have also been probably the people that have suffered the biggest defeats and the biggest disappointments in the world.

So, well, the other thing that, the other thing that, Mark, you may know, you may not, but the audience certainly wouldn't know this, is that, you know, Will and I have something else in common, is that both of us were introduced to this very large human being called Tony Robbins in our early 20s.

Yes.

And so both of us were very influenced by, you know, Tony's statement, which is life is happening either to you or it is happening for you, and you can choose to identify either way. So for me, when I had to stop playing football, I had a choice. I could lay down and do something different. I also had to put myself through college. I had to figure out how to work. I also decided to take up the game of golf. I decided to go out and actually become pretty good at golf. Walked on, missed it by a shot. That really stunk. So I had to decide, am I going to come back the following year and do it again? And I did. Fortunately, I made the team. Was never good enough to travel, but I was good enough to be on the team and play with people that were a lot better than me. Which made me a better player. But also it just gave me the opportunity to experience things I would have never experienced while waiting tables, while getting married. And oh, by the way, starting to trade commodities to help pay for my school. Learned a lot of very interesting lessons that way, too. But it is all about just overcoming adversity. It is just saying, you know, this is my outcome, this is what I'm about, and I'm going to find a way, come Hades or high water, to work through it. I just love the way that you put it related to grit. Because that is something that I'm not sure how easy it is to teach. I think you can get better at it. I think people can have the right mindset. And I know for sure that people can become more impervious to what the world is throwing at them if they work at it and they have a good daily routine to make sure that they can be in the right state of mind as they go about their day.

Yeah.

So, Will, we're going to end it there. Thank you so much for your time. We're so Very grateful that you joined us and we look forward to obviously talking to you very soon.

Well, thank you for having me on, my friend.

Okay. Absolutely. Take care, Mark. That was a fascinating conversation with Will. And I would, you know, as we kind of wrap up here for this session, you know, let's talk about a little bit about what your key takeaways were. And I'll give some thoughts as well. What are some things that jumped out at you?

I think that— I think a lot of investors don't appreciate how physical the energy world is, how it's about real commodities. It's about real places. It's about real property. It's about real life situations that people have to deal with. And because of that, because it's not something that's like up there in the ether, up there in the cloud, you have to deal with them in a very physical way. Right. So I think about, you know, commodity prices and what's happened over in Europe. I mean, Will had some interesting conversation there. These are concrete issues. I thought that the AI conversation was really interesting. I mean, everybody wants to talk about AI in the context of data centers, but I really appreciated Will's comments about, what AI is doing in their business and getting a better appreciation for how they've been using what was the pre-AI, which was machine learning, and now has pivoted into AI. And then, but most of all, it was the last part. It was what Will talked about with the grit and finding something in yourself. I think success is a horrible teacher, and I think failure, or what could be viewed as failure, is the best one. And I think it was really interesting to hear how that shaped Will's life, that shaped your life, and certainly shaped mine.

Certainly shaped yours as well. You know, the conversation about how technical and how much technology is involved with what it takes to actually produce the energy that all of us take for granted to run this, you know, this, this tablet that I'm holding and this, you know, the system that we're using right now, all of it takes energy, but it all comes from really hard to do stuff. And I, I think specifically about the aha moment that about 300 of our investors had when they came to actually Houston to the Museum of Natural Science. If you've never been to Houston, Museum of Natural Science here has an entire floor that is dedicated to energy, all kinds of energy. You want to understand how hydro works, it'll teach you. You understand how hydraulic fracturing works, it'll show you. And it's a very interactive set like most museums. It's really quality the way that they teach you how much technology it actually takes to do this. And vast majority of people have no idea how complex it is until they look and they see on a screen, okay, we're going to drill down a mile, then we're going to go drill horizontally for a mile, then we're going to, you know, blow a hole in some rock, we're going to pull stuff out, we're going to bring it back up, and then we're going to turn it into what you actually put into your automobile if you drive a gas-powered engine, or to make your electricity, or to be able to enable you to use your house in any way, shape, or form, or this wonderful, powerful thing we have in our pocket called a phone. And then of course, what you said, the way that AI is changing the ability to quantify risk. And that's one of the things that Will, I really took away is so much of what we talked about, and he referred to it as what's the worst-case scenario? If we can live with that, the upside will take care of itself. Well, AI is helping us, and it's certainly for them in a very technical world, helping them be able to have that ability that they didn't used to have to be able to say, okay, how could all of these things potentially fit together in a way that works well or potentially in a way that doesn't work well?

It's interesting because you, once you have these tools, you really wonder how you able to operate without them. How could you make decisions without having this information? I know in our business it's impacted it the way that you and I are familiar with, but I'm sure everybody else has as well, where like you're— you, you think you have the answers to the questions, but then you realize I'm not even asking the right questions, let alone getting the answers from them.

Get— Tony says it all the time, ask better questions, get better answers. And I have a very fun story, uh, as we close here to talk about how lifelong learning is really, really important. And fortunately, Lisa, my wife, and I have a wonderful, you know, model for that in her mother. So my mother-in-law literally was with us over the weekend and she looked at Lisa and she said, you know what, you keep talking about this ChatGPT thing. I want it on my phone. I want to be able to use it all day.

That's amazing.

So literally, for Winona, we installed ChatGPT and for the next like 5 hours, she's like looking up everything she's never looked up before going, oh wow, this is amazing. And you start to say, for somebody who's 92, thinking about what they had to do 40 years ago, 50 years ago to be able to access the information that she was able to get within a matter of 5 seconds, it was literally a little overwhelming for her. And it is for me as well. But just that's how much our world is changing and energy is no different. So everyone, thank you so much for joining us for the Holy Grail of Investing podcast. With Tony Robbins and Christopher Zook. Mark Waid, thank you so much for being with us. Will Van Lo, again, thank you. We're so grateful to all of our guests, and we'll see you next time.