Jason Jacobi, CFP® (00:00.44)
Everyone welcome to the closing bell Mark Boyer Jason Jacobi here. We are switching it up. Ladies and gentlemen, we are going more topical for our closing bell. So each week we are going to come at you live with a different topic from the week, a big storyline, big news, big economic indicator that we’re looking at. But this week we have something really special and close to our hearts.
Mark Boyer (00:03.841)
you
Jason Jacobi, CFP® (00:28.782)
It is energy. It is fossil fuels are going nowhere anytime soon. And that might sound like a provocative headline and it is used as a provocative headline in the major news media, but it’s not meant to be. We’re just going to have a conversation about it. Let’s talk about fossil fuels, right Mark? And, and, uh, and what, what it’s got in store as we look at it from a global, a macro scale and a micro scale here in California. So let’s, let’s dive into it. But before we do,
Mark Boyer (00:46.401)
Yeah.
Jason Jacobi, CFP® (00:57.454)
I think our listeners and viewers need a little bit of a background here, Mark. So if we look at the S &P 500 as a whole of 500 companies, okay, energy accounts for just 4%, which is a historically low level, right? In terms of company weighting and the S &P 500.
Mark Boyer (01:12.321)
Yeah. Yeah. Yeah. Usually 7 % is kind of the natural weighting has been for, you know, for energy and the S and P. So, yeah. So it’s lower than it has been. It might be because, you know, a lot of one reason for that right now is currently is that energy and energy stocks haven’t moved like technology. I mean, you know, you got the Nvidia’s and different.
Jason Jacobi, CFP® (01:20.558)
you
Mark Boyer (01:40.181)
AI stocks that have really moved and kind of, you so that, so because of that, uh, you know, we’ve been watching and then been investors in some of the oil stocks, you know, cause they got great dividends and, you know, and, and fossil fuels aren’t going anywhere long -term, but, um, you know, those places, you know, just haven’t moved a whole lot. So anyway, it’s yeah. So typically it’s, it’s roughly seven and right now we’re sitting at about 4 % of the S and P and the, and the energy space.
Jason Jacobi, CFP® (01:51.852)
Uh huh.
Jason Jacobi, CFP® (02:07.616)
So do you think also that has something to do with with current challenges in the energy sector? Obviously, previous administration, we were we were more energy independent now, for multitude of reasons that has changed drastically. For example, which again, I want your your personal thoughts on this from from a personal level and a level of.
Mark Boyer (02:20.161)
Thank you.
Jason Jacobi, CFP® (02:31.05)
of somebody that watches energy companies and their movements, their earnings, revenues, and so forth and production. So if we look at the historical production for the Permian Basin, which is the largest city, we’re sitting on the largest oil reserves in the world, right? I mean, this is just, it is what it is. There’s been a three -year production decrease in overall production of oil and gas.
in that Permian Basin. So for the last three years, now you as growth from what we’ve heard and people we’ve listened to, experts in this specific field, right? We’re not going to pretend to be experts in everything, oil and gas. We take information from sources and we digest it and put our own boiler financial personal spin on it. But there’s really been a lack of investment, right? Maybe on the supply chain side, is there anything that stands out to you on that side of things that might cause some extra challenges?
Mark Boyer (03:13.103)
Thank you.
Mark Boyer (03:28.609)
Well, like you said, I mean, we’ve we’ve we’ve slowed down. Oil has become sort of a bad word, right? I mean, it’s been it’s been it’s almost like, you know, you’re not you’re not virtuous or whatever if you’re talking about burning fossil fuels anymore. But they’re like we talked about. I mean, the reality is, is fossil fuels are a major, major part of our economy. And in the last few years, especially, I mean, it’s really, you know, we’ve really slowed down drilling.
Jason Jacobi, CFP® (03:30.24)
you
Mark Boyer (03:58.305)
Like you said, I mean, our production out of the Permian Basin is, you know, has just been dropping, dropping and less money has been putting into new production, new, you know, basin, you know, finding oils, things like that. I mean, it hasn’t been worth it for the companies to to get out and go, you know, look to increase production. And so thus, you know, we’re all that’s slowing down. And, you know, you’re getting to a place where, you know, you just don’t.
Jason Jacobi, CFP® (04:11.404)
Yeah.
Jason Jacobi, CFP® (04:21.486)
you
Mark Boyer (04:25.217)
You haven’t built anything and it’s not like these are like, Hey, I’m going to build a new refinery tomorrow. It’s like, these are long projects that have slowed down slowly and then to ramp them back up eventually could be a challenge. So I think that’s the current situation in the world is, especially in the U S is we haven’t been putting money into those places as much as.
Jason Jacobi, CFP® (04:49.468)
you
Mark Boyer (04:52.161)
We like and also in you know, we’re insufficient as we understand where we you know, we’ve we’ve grown insufficient exports, you know liquid liquidification. They talked about taking natural gas and making it liquid, you know, transport of energy like natural gas and coal across, you know, railroads and shipping lanes. All that stuff is worse. We’re just not in a place right now where we’re very strong to so, you know, a lot of.
Jason Jacobi, CFP® (04:54.22)
Mm -hmm.
Jason Jacobi, CFP® (05:10.19)
Yeah.
Jason Jacobi, CFP® (05:19.918)
to handle that. Yeah.
Mark Boyer (05:21.377)
All the move to renewable and all these great ideas are already putting us, in my opinion, in a perilous situation with our true needs of energy, and that’s in fossil fuels.
Jason Jacobi, CFP® (05:36.35)
I think that’s something really key. Again, we’re not hammering renewable energy. That’s not what we’re doing here, but I think it’s important to be decisive. I think it’s important to be awakened to the fact that, which we’ll get into in a few minutes in the podcast about how much fossil fuel is used in renewable energy as well in the production of car batteries, things of that nature. We’ll get there. But yeah, new ideas are great, like you said.
That’s part of the evolution of economies and growth of and human nature to strive to be better than we have been, right? And to push society forward. So 100 % agree with that. Now, let’s talk and break down a little bit more of pricing dynamics. Obviously, there’s different ways to price things, right? Like a ton of coal, that’s how they price coal, natural gas, like parts per million, I think something like that. You’ve got…
Mark Boyer (06:07.643)
Thank you.
Jason Jacobi, CFP® (06:34.318)
price per barrel for oil. That’s how we kind of look at what we’re paying for a barrel of oil and then transported into a refined into gas, excuse me. But they’re all measured in BTUs, which is like the burning units basically. And that’s how we kind of look at how things burn and how it creates energy. Cause when things are not to get into the chemical composition of things, but as things change their chemical composition, that’s how you get combustion. That’s how you get.
energy to be emitted from these organisms per se. So can you give us a little price history on oil per barrel? Let’s just focus on oil since we’re talking about it for now. So I know we were just looking at that a few minutes ago.
Mark Boyer (07:13.953)
Yeah. Yeah. So currently we’re around what West Texas crude somewhere 81 bucks right now. And part of the reason why, just so our audience understands, we we’ve been thinking about this a lot because I don’t know if you noticed lately, but, you know, oil has started to kind of ramp up a little bit in here and energy stocks and, you know, the big companies like Chevron, Exxon, some of the drillers, a lot of them are starting to move and we haven’t seen that in a while. So.
Jason Jacobi, CFP® (07:20.686)
Yep.
Mark Boyer (07:42.561)
I think that’s part of what we’re talking about here is where, you know, it looks to seem like oil starting to pick up steam. So it’s interesting that $81 and, you know, a barrel, uh, you know, you look historically, you know, typically I think we got used to, you know, $40, you know, we’ve been in $40 all the way from, you know, the mid eighties to kind of almost into the early two thousands. Um, and then, uh, you know, coming out of.
Jason Jacobi, CFP® (08:08.27)
I mean.
Mark Boyer (08:11.553)
you know, into the two thousands after, after everything happened with nine 11. And I’m not saying it was tied to that, but in those, those, those years, you know, uh, you know, oil went up to at one point it got as high as in nine and 2008 in the financial crisis, as high as almost 200 bucks, uh, 198 52 is, uh, kind of as high as crude got at that point. That was crazy. Right. And then you have this extreme.
Jason Jacobi, CFP® (08:17.742)
Right.
Mark Boyer (08:37.473)
Then it kind of went way back down in 08, you know, all the way back down to the kind of close to where we are now and then spiked up again. And then here, even all the way into, you know, into COVID when COVID at the bottom, you know, we’ve got down to 47 bucks a barrel. And so now we’re sort of in that mid range back. Right. So you know, with energy and energy prices, you can get some real extreme volatile pricing, you know, based on just.
Jason Jacobi, CFP® (08:54.382)
That’s wild.
Mark Boyer (09:05.889)
economies and, you know, events of the world wars and, you know, you know, especially in the Middle East. Yeah, different things like that, especially when you get into that Middle East section where, you know, we got to, you know, Iran and all the oil Saudi Arabia, those places are significant from a geopolitical standpoint. So anyway, a lot of all that point, the point of it is very volatile area as far as the and right now we’re just getting a little move up.
Jason Jacobi, CFP® (09:07.468)
Hmm?
Jason Jacobi, CFP® (09:12.556)
Supply chain issues, yeah.
Jason Jacobi, CFP® (09:23.63)
Hmm?
Mark Boyer (09:35.553)
which is interesting to see how that progresses here.
Jason Jacobi, CFP® (09:38.894)
Yes, we’re moving into the seasonality of oil and in terms of price movement upwards, right? Summer’s coming up, spring, people are getting out of their winter slumber, hibernating like bears. Now that’s what I’ve been doing. I don’t know about you. Get my butt back in the gym now. Yeah, but again, supply and demand, right? So OPEC’s cut their production per day in oil production there.
Mark Boyer (09:42.623)
Yes, summer, summer months.
Mark Boyer (09:50.753)
I’m ready for spring, bro. It’s really gonna be good. Yeah.
Jason Jacobi, CFP® (10:06.254)
And obviously us being energy dependent again, it hurts that and makes us pay more in terms of importing oil from, uh, from foreign nations. So yeah. So you’ve got that seasonality where the demand is going to go up. Supply has been cut, props up prices, right? Which, which again, revenues and earnings are going to earnings per share will drive, um, market performance and drive the energy sector, uh, upwards, um, which we could talk about later as well.
Mark Boyer (10:09.121)
Yeah.
Mark Boyer (10:32.993)
Well, which affects us, right? Because it’s, you know, again, we’ve been talking about inflation and then, you know, you get into the CPI, PPI, and then it’s like, you know, X energy and like, well, how can you throw energy out of that number? Because man, I got to fill up my, my car, you know, and so people are like, well, that’s part of my, you know, monthly expenses. And, you know, and then gas prices are interesting because, you know,
Jason Jacobi, CFP® (10:41.518)
Yes.
Yep.
Mark Boyer (10:58.017)
you know, as they go up, it depends on kind of where you live because the price of gasoline is interesting because, you know, we dropped, I like talked about earlier, you know, a lot of our refineries since COVID we, you know, we’ve shut down a lot of refineries since that period of time. And, and so the gas, you know, again, you know, not a lot of, not a lot of drilling going on that, you know, supply demand that that throws the, you know, the prices, you know, upload load.
Jason Jacobi, CFP® (11:10.958)
Mm -hmm.
Jason Jacobi, CFP® (11:18.688)
you
Mark Boyer (11:24.961)
Low supply, high demand, prices go higher. And then it’s funny because it sort of depends on where you live, right? I go back to the Midwest or East Coast from California, like, gosh, price is so cheap here. It’s like half the price of what we pay in California. And there again, California tax heavy.
Jason Jacobi, CFP® (11:26.7)
Yep. Yep.
Jason Jacobi, CFP® (11:42.966)
Why?
Mark Boyer (11:51.041)
lot of fees and expenses in our price of gas that we pay out here. So, you know, it’s just a lot of sales tax, you know, blah, blah. And it all, you know, it’s kind of all just piles up on you. And so it’s, it sort of depends on where you are, kind of, you know, what state you’re involved and live in. But, you know, basically, you know, we’re sort of in this range right now, 70 to 95 per barrel right now.
And again, that’s about double what we paid just not that long ago in the 40s. So that’s, again, another reason why energy’s been more of a drag on household spending.
Jason Jacobi, CFP® (12:32.046)
That’s those are really, really good points. And going back to California, I mean, so we’re paying more per barrel for sorry, per gallon of gas at the pump because there’s a disparity in what we’re paying per barrel. I mean, that’s that’s pretty congruent across the United States, right? But in terms of sales tax, in terms of gas tax here in California, they California has the highest state gas tax rate.
in the United States at 77 .9 cents per gallon. So that’s part of the reason why we’re paying more. But let’s dive in a little bit deeper into macro. Let’s look at macro. Let’s look at the globe and how the energy composition and consumption of fossil fuels, of alternative energies, is the composite numbers of that around the world. So…
Mark Boyer (13:05.985)
Yeah.
Jason Jacobi, CFP® (13:26.636)
Did you know that a third of the world’s energy comes from oil, coal, and natural gas? So a third each. So 30 % comes from oil, 30 % from coal, and about 30 % for natural gas. The other 10 % is alternative energy like hydro, nuclear, et cetera, and also even like biofuel, things of that nature. So what does that tell you?
Mark Boyer (13:27.493)
Thank you.
Jason Jacobi, CFP® (13:53.876)
fossil fuels aren’t going anywhere.
Mark Boyer (13:54.241)
I’m not going anywhere. I mean, how do you, I mean, that’s, that’s a lot of years of, you know, look, so humankind, we’ve always been looking to figure out how to, uh, you know, burn fuel, you know, fossil fuels, um, have been a place, you know, one area that’s, that’s kind of, you know, we were talking about this, you know, going back thousands of years, you know, ask the question. So what’s been the, the longest.
Jason Jacobi, CFP® (14:17.582)
Mm -hmm.
Mark Boyer (14:22.271)
What are some of the old style ways of energy that they use? Right? Fuel. Coal has been around for a long, long time. But even before that, what’s tell our audience what the main source of fuel early on?
Jason Jacobi, CFP® (14:25.038)
Fuel. Yeah. Uh huh.
Jason Jacobi, CFP® (14:33.976)
wha – wha – whale? What is it? Whale oil. Whale oil.
Mark Boyer (14:37.919)
Well, yeah, whales, right? I mean, it’s part of the reason why they were, you know, you know, those ships way back when they were going out and just killing whales because of the whale oil and using the oil on the whales to to burn and, you know, to create fuel. So, you know, you know, again, so, you know, humans have been looking for things to build, you know, to burn trees, you know, which are like biomass, things like that. There’s always been a.
this unsaturable desire to have something to burn as fuel. So it’s interesting how it’s been that way. You don’t think about that, but you always think about oil only, but it’s a lot of other things as well.
Jason Jacobi, CFP® (15:21.998)
And trajectory speaking of human nature and always looking for different types of energy to burn, to utilize, to further their plans for expansion or whatever it may be, or to fuel food production, you know, because obviously you need, you need some kind of energy to, you know, we used to be horse and, you know, horse plow was the energy. The horse was the energy, but the horse, you know, eats the grass and the feed and, you know,
biofuels, there’s a lot of different ways that the energy is utilized, not just oil or coal or whatever it may be. But there’s, if you look at the trajectory of history and you look at what is the only fuel type that has fallen off, coal continues to grow, fossil fuels continue to grow. The only thing that has decreased is whale oil use, right? Because obviously that’s.
Mark Boyer (16:14.305)
That’s what we were talking about. That’s the only one that kind of went away. Killing wells just became really not very attractive and rightfully so. But that’s the only one that’s gone away. The rest of them have all grown. It’s interesting. Those are interesting facts that we don’t talk about a whole lot.
Jason Jacobi, CFP® (16:26.35)
Yeah. Yeah. Absolutely.
Jason Jacobi, CFP® (16:39.662)
So again, looking at the macro scale, and again, Mark, I want your take on this. We’ll kind of break down the international numbers of energy here. Cause I think it’s really important for our viewers and listeners. Again, looking at the macro approach, we live in our own bubbles here in Orange County, Texas, New York, wherever you live, right? You have your community bubble and we kind of see things through the lens of which we’ve grown up in or that we’re at now. But if you look at non -fossil fuel energy usage,
globally, okay? It’s less than 2 % globally. And our economies, our populations, for the most part, there’s more people, I know certain economies, they’re shrinking, population decreases, such as China, the US, right? Like we’re having labor force issues down the road, we will, because there are less births per family. So,
Talk a little bit about that and talk about the study that was done about the renewable energy in Europe, that 50 % of Europe’s energy usage. I think that’s really important to look at.
Mark Boyer (17:48.833)
Yeah. Well, there was a study done, uh, you know, the, basically what happened is they claimed that there was 50 % of the usage and energy, you know, energy usage in Europe was, is, was renewable. And, um, we were talking to one of our analysts who’s, uh, who basically said, but, you know, he’s like, wow, really? That’s really high. That’s impressive. But then as they looked more into it and dug down, uh, turns out that it was, you know, they were looking at a time period of only.
Jason Jacobi, CFP® (18:08.622)
Yeah. Yeah.
Mark Boyer (18:18.497)
probably a couple months. And it was solar and it was really sunny at that time. And so as they dug into it, it ended up being a much lower position. I forget what the number was. Do you remember what the percentage was on that?
Jason Jacobi, CFP® (18:37.134)
Yeah. So, so basically the 50 % number was only the percentage of electricity usage to like power your lights and things of that nature. So it was just like home usage. So a lot of that came from solar, like you said, maybe Hydra, wind powered. Um, but most of it was solar because they do have a lot of solar energy, um, capabilities there. But again, Europe, if you’ve ever been over there, it’s not the sunniest place in the world.
And this study was done when there was a few months of constant sun. So they’re able to power 50 % of their home, their electricity, um, utilize renewable energy, which is still great. But if you dive deeper, and again, I think this is something that, that you’ve talked about, um, the total power mix. So all power usage, all energy usage for Europe, only 17 % was renewable, which is a stark contrast to the 50 % that.
Certain agenda users might, might try to implement or use in their studies, but 17 % was the only, only the amount that was renewable. You break that down even further. 5 % of that 17 was hydro super clean, not good for the environment though. Uh, because basically you’re blowing up, you know, tops of mountains next to highly populated areas. Um, it. Exactly. It disrupts that natural habitat 11%.
Mark Boyer (19:54.241)
Yeah, killing animals.
Jason Jacobi, CFP® (20:01.294)
of that is biomass fuel, which you talked about a few minutes ago, burning trees in the US South actually funds a lot of Europe’s biomass fuel usage. So what do trees do? They produce twice as much CO2 as coal. So you’re trying to be more renewable, clean energy, biomass fuel, which again, the thought is great, but they’re burning twice the amount of trees.
Mark Boyer (20:05.825)
Please.
Mark Boyer (20:23.369)
Yeah.
Jason Jacobi, CFP® (20:28.238)
Or is there burning trees that emit twice the amount of CO2, which is the harmful, uh, composition, you know, for our atmosphere and global warming and all that kind of agenda talk. Um, that’s really interesting to see when she’s saying you have to replant those trees, right? If you want to use them again, you gotta replant the trees and wait for them to grow again. So where’s the give and take of being sustainable, which is great. We want to have sustainable stuff and to live healthy and not have, you know,
Mark Boyer (20:47.617)
No, no.
Jason Jacobi, CFP® (20:57.998)
be walking in pollution and all that. That’s all great. But how do we get there? And how do we become a more conscious society? Like realizing, oh, yeah, we want to be more renewable. It makes sense. But how do we balance the dueling realities of that, would you say?
Mark Boyer (21:19.105)
It’s tough. I mean, because you know, the reality is you need to be productive. You need to get when you’re cold, you need to heat up your home. You need something to work. You got to, you know, I mean, we’ve gotten used to that, right? It’s not like, you know, we don’t have fires anymore. I know where we live, you know, came, you’re even supposed to burn wood anymore because of the, you know, in certain areas, you know, in fireplaces. And, you know, if you…
If you got a cookie, you know, you just want to be able to have the convenience of life, you know, that really has come from fossil fuels, frankly. I mean, if you go back and look at when fossil fuels, we started using this in America. I mean, it changed everything. We’re a healthier society today because of because of really efficient energy uses because we’ve been able to clean up. I mean, think about the, you know.
Jason Jacobi, CFP® (21:49.102)
That’s Dotes.
Jason Jacobi, CFP® (22:06.382)
There you go.
Mark Boyer (22:10.529)
the early advice, people that came over into America, they came and they settled the settlers. And then what happened? Well, they get sick from the water was not good. And there was animals pooping upstream and all these things happening that they were getting all kinds of diseases. And then they were able to take fuel, fossil fuels, mostly in different ways of cleaning up that
Jason Jacobi, CFP® (22:21.262)
Excuse me.
Mark Boyer (22:38.593)
that water cleaned up the, you know, the people sewage, all that was improved our way of life. And then now today, I mean, you know, you’re, you know, everything we do, you know, move, we travel, we jump on a plane. I mean, it’s not solar planes. It’s not a, you know, it’s not a, you know, maybe someday we’ll get there, but we’re not even close to it at this point. So it’s, it’s, it’s difficult because.
Jason Jacobi, CFP® (22:41.07)
sewage systems, all that.
Mark Boyer (23:04.833)
We all don’t want to be in, we don’t want to be inconvenienced at the same time. We wanted, we want to clean things up and be good stewards of the earth that God’s given us. But at the same time, you know, um, you gotta be practical and real about, you know, how this is all working. And, and, uh, I think that’s, uh, I get off on a soap box with this stuff, but you can’t, you have to do that. Um, because it’s, it’s silly when you, and we’ll talk here about, you know, um, just,
Jason Jacobi, CFP® (23:07.246)
Yeah.
Jason Jacobi, CFP® (23:24.666)
No, that was a good point. Green energy.
Mark Boyer (23:34.943)
Yeah, clean energy here in a bit and like CO2 and all that. I mean, it’s it’s it’s it’s quite astounding when you hear the actual statistics and facts about how much CO2 is emitted and and even these new, you know, clean energy forms and what it takes to to make that happen. So anyway, it’s it’s it’s a really interesting subject. And I think bottom line for us, you know, I don’t want to be inconvenienced. Like I want to be able to.
Jason Jacobi, CFP® (23:50.734)
Yeah.
Mark Boyer (24:01.857)
do things. I don’t think anybody nearly does. We don’t want to pay the price. It’s like when I was in training camp back in the day, we were we were at New York and it was the Jets and it was a hot summer day in New York. We got up early first first practice early morning, always the worst humid. It’s like just, you know, and I’ll never forget our line coach. We were we were just dreading. It was just it was just one of those days where you’re like, I don’t want to practice today. And he stops us and looks at it, gathers us up and says,
He yells, he goes, everyone wants to go to heaven, men, but nobody wants to die. And his boy was like, you got to pay the price, right? If you want to if you want to get to the Super Bowl, the playoffs, this is when you got to pay the price when it’s no fun. And the reality is, is that, you know, our our world, our economy, everything’s work works so smooth. It’s not like we want to go backwards and have, you know,
Jason Jacobi, CFP® (24:36.286)
Ha ha ha ha ha ha ha ha ha ha
Jason Jacobi, CFP® (24:53.752)
Okay.
Mark Boyer (25:00.605)
these things not work the way they should when we’re used to good things being good and having made us more efficient and more healthy and in all these different practical areas. So it’s really interesting. It’s quite a dynamic.
Jason Jacobi, CFP® (25:13.858)
Absolutely. So basically we need to realize that we don’t need to go through massive, massive growing pains. I’m sure you remember when you were starting to grow like your knees, your ankles, wherever was hurting so bad. I remember laying in bed just like on the verge of tears because it was just like, it was a painful time. Like you’re growing, you’re going through a lot of change and we could limit those growing pains. There’s always going to be growing pains as we
change and grow and develop, but we can limit the severity of it if we can say, Hey, you know, let’s, let’s be real. Like you said, let’s, let’s realize that fossil fuels are going nowhere. Let’s use it to utilize and progress and move energy even more, more forward, not correct English there, but let’s, let’s move it forward. Let’s continue to innovate and grow. That’s the great thing about the human spirit and human nature. We’re always looking to do that, but there.
we can find neat ways to use natural gas, which is seen as a dirty fuel, a dirty, dirty energy. They’re starting to crack off that carbon molecule and clean it and utilize that for clean energy. You see these like clean energy, natural gas buses driving around right now. So I think that’s probably going to be the future of gas and energy is going to be like a renewable gas or natural gas or hydrogen that they’re going to really utilize in a clean way.
But and fossil fuels will help us get to that point or even be utilized in that renewable sphere as well. Yep. Yep.
Mark Boyer (26:36.609)
Absolutely.
Mark Boyer (26:43.041)
No doubt. And that’s what’s great about capitalism. If you let people work and you stop restricting us of what we can find, I mean, we’re going to find the best solutions to these companies are going to do that. If there’s money to be made somehow to put put food on the table for families and so forth, they’re going to find a way to make this better. I’ve seen a significant difference, frankly. I mean, I’m old enough to know this. I mean, I remember I grew up in L .A. I remember, you know,
you know, times in the 60s and 70s where the warning would be out. You couldn’t even see downtown L .A. because of the smog. And I’m amazed now living, you know, further out from L .A. that there’s many mornings I can wake up and see the mountains from, you know, 40 miles away when I couldn’t see literally the downtown buildings from when I was at SC from like blocks. I mean, we could even we could even see it. And so it’s gotten better and it will continue to get better. But where we get in trouble.
Jason Jacobi, CFP® (27:14.446)
Uh huh.
Jason Jacobi, CFP® (27:23.79)
Yeah. Yeah.
Mark Boyer (27:41.217)
Okay, is when groups start trying to pound something down and force you to go somewhere when we’re not ready to do so and we’re not, it’s not, it doesn’t make any sense. And that’s the part that gets us in trouble. And to some degree, I think could cause some problems for us here in the near term because of what’s happened with fossil fuels and the whole, you know, evil like Darth Vader, you know, idea of what, what, you know,
Jason Jacobi, CFP® (27:46.018)
Mm -hmm.
Jason Jacobi, CFP® (27:52.75)
Absolutely.
Mark Boyer (28:09.121)
Oh, you’re a bad guy if you you know, you’re for burning gas. It’s like, are you kidding me? I mean, but because of that, you know, these companies have, you know, like we said, slow down their, their, you know, their, their, their not, they’ve cut down pipe pipelines, they’ve closed down refineries, all these things, because, you know, they have to make money to do this. So if you’re not going to take it, you know, if you’re going to go outside and buy it from another country,
Jason Jacobi, CFP® (28:22.926)
Okay.
Mark Boyer (28:36.681)
you know, it just, it causes us to have a problem in what could happen because our, our, our demand is not going to change a lot, but if our supply drops, we’re going to get, you know, again, higher prices. Um, and you know, that’s where, that’s where, you know, looking at energy stocks and so forth and all this to say is that could be good investments right now as they, you know, if they start to roll up in here, especially, you know, what we’ve been talking about is there.
There’s good opportunities, I think. Priced a book with as low for these energies, it got high, it got really good dividends that they pay. Frankly, energy probably is going to be moving higher here in terms of profitability. And then that weighting to the S &P will probably increase. All things will come back to the median there. So anyway, there’s a lot of reasons to probably like energy in here for some of those concrete reasons.
Jason Jacobi, CFP® (29:08.204)
Yep.
Jason Jacobi, CFP® (29:11.714)
Dividends.
Jason Jacobi, CFP® (29:22.842)
Yeah.
Jason Jacobi, CFP® (29:31.63)
Yeah. And I want to go back to your point you make about near -term growing pains and near -term issues that we could run into. For example, I mean, you’re looking at Newsome signed into law that there will be no more gas cars produced in California after 2035, I believe it was, right? Which is the dumbest thing you could do. And I’m going to call it out as it is. Again, this is more about forcing an agenda down somebody’s throat.
Mark Boyer (29:50.721)
This is the audience.
Jason Jacobi, CFP® (29:55.214)
We’ve all just talked about, hey, yeah, let’s go forward. Let’s go towards renewable energy. Let’s get cleaner and better and all that kind of stuff. But you can’t force feed this down Californians’ throats any longer. I mean, you’re seeing demand for EVs start to go down because we’ll get into that in a second. But you’re seeing like car companies that were going more EV like, oh, yeah, this is the energy revolution.
They’re producing less EV vehicles because the consumer doesn’t want it and they’re all about making money. Like you said, capitalism, they want to drive forward the markets. They want to make money, put food on the table, have corporate growth and be better. But this mandate is absolutely crazy. And so we’re starting to see the pushback of that.
Mark Boyer (30:34.753)
Be better.
Mark Boyer (30:43.969)
Well, yeah, look what’s happening. I mean, yeah, so we’re all for being better. And again, it sounds great on paper, right? I mean, to do this, to get to a fully renewable energy, no gas cars and it all sounds virtuous and fantastic. Like, hey, it’s, you know, it’s, it’s, it’s just, it sounds so heavenly, but. But it’s just the reality is, is if it’s not, if it doesn’t help people still live their lives and get to what they need to do and.
Jason Jacobi, CFP® (30:49.102)
Utopian,
Jason Jacobi, CFP® (31:11.566)
Yep. Yep.
Mark Boyer (31:11.807)
It’s just not it’s not possible until until the technology is there to where it makes sense and it’s more economical for you to do to do that. So, you know, those are all things that are there. You can’t really again. You always have trouble when you got governments mandating something and what we’re seeing now is that a lot of those companies, I mean, look at Ford. I mean, Mercedes, all these companies are coming out right now and Tesla, Tesla struggling like crazy because.
There is a group of people, frankly, it looks like there’s been a group of people who are all in on EVs, right? Just want to, they’re going to buy it because they’re just going to buy it. I mean, because they believe in it, they want to buy it. And that’s great. But there’s another group of people, okay, a large group of people, a majority group of people who are not convinced that that’s where they want to go. And so now, you know, they’ve stopped there, you know, these companies have actually put tons of dough into the EV markets and now they’re just losing months.
Jason Jacobi, CFP® (31:46.15)
Yeah.
Mark Boyer (32:10.369)
just tons of dollars, uh, you know, in, in that investment, because all these EVs are still sitting on the lot and nobody’s buying them. So what’s California going to do at that point? You know, you’re going to force us, you’re to put it, you know, I mean, what, you know, you say like, and maybe so, I mean, I could see that happening, right? Some way, uh, you get in into that place, but, um, I know you want to do it’s crazy.
Jason Jacobi, CFP® (32:11.192)
Hand or fist? Yep. So
Jason Jacobi, CFP® (32:40.43)
I have a question for you. So how, how are you going to say you’re forced to buy an electric car one day? How are you going to be able to charge it in the summer months or in the warmer months in California? Excuse me. Excuse me that, uh, you know, because we already have rolling brown outs and blackouts and telling us to conserve energy. What happens when everyone has an electric car and needs to charge their car every single night when you have ACs running like, and you already have astronomically high electric prices. And now they’re talking about.
tiered wage system. So if you earn over 180 ,000, you’re paying almost $100 on average more a month on top of your normal electricity bill. So this just doesn’t seem, again, we’re looking at it from an economical and common sense standpoint. The money is the numbers don’t add up. So I think that’s really interesting. I want people to think about regardless of what side of the aisle you’re on. Does it make sense? Not at this point.
Mark Boyer (33:33.249)
Well, not to mandate it again. These are great. If you want to buy that, if you want to do it, great. But but don’t force don’t try to force everybody else to do it too. And until it’s going to take a while, we’re not we made the comment at the very beginning. We are not ready to get rid of fossil fuels. We’re not even close. We’re we’re we’re I mean, we’re I mean, we’re 100 years maybe away from that. Seriously, like, I mean, we’re not even close. And so, you know, it’s silly to live in this. You call it, you know,
Jason Jacobi, CFP® (33:49.806)
No, decades, hundreds.
Mark Boyer (34:03.297)
you know, you copia in place where, you know, that, you know, it’s just don’t think it’s going to happen. So you’re going to get a lot of pushback and, and then, uh, yeah, it’ll probably depend on, you know, who, who wins the next elections to there’s a lot of politics involved in this. Um, but ultimately I think it’s going to play out the way it usually plays out in capitalism. I mean, eventually, uh, the consumers will make those decisions, what they want to do and the businesses have to adjust.
Jason Jacobi, CFP® (34:03.382)
utopian thought processes.
Jason Jacobi, CFP® (34:25.07)
Okay.
Mark Boyer (34:31.457)
And that’s what’s happening right now.
Jason Jacobi, CFP® (34:34.156)
Amen to that. And I think that’s a good, a good point. And before we end this podcast, again, we’re not hammering on anything. We’re just giving our listeners and viewers a reason to ponder and think. And to be, again, tie this back to the global economy, our local economy. I think it affects every single one of us in every sector in every way. So, and then, and then last thought to think about is if you want to turn the world green again, if you want, again, I think everyone wants again, to be more renewable and take care of.
the earth that God’s given us. It’s such a beautiful place. We love being in nature. You love to be out in fish. Yeah, you love to be on the lake fishing. I love to be in the mountains snowboarding. I think there’s nothing more beautiful than being out in nature. Amen to that. However, we need to realize what it takes in order to be renewable, in order to what it takes to be green. So you need a ton of natural resources, right? You need copper, cobalt, lithium, nickel, all types of metals.
Mark Boyer (35:06.913)
Yeah, and it’s come a long way. And it’s come a long way, like I said earlier.
Jason Jacobi, CFP® (35:33.602)
An investment of fossil fuels to achieve total clean energy will be very intensive because why? Why would you think so, Mark? What would be some examples of using fossil fuel to basically make those batteries? How would that work?
Mark Boyer (35:53.313)
Well, I mean, if you ever see, I mean, there’s made, there’s huge, you have to dig up a lot of ground to find the metals. Like you just mentioned, um, to, to basically, you know, even create a battery. Um, you know, there’s, there’s the, there’s, they’re digging up of, of, uh, you know, cobalt, all these things that they got it, they have to do to, then you have to transport it. So you have to, you have to get it, you have to process it. Then you have to transport it to a place like China.
who makes a lot of these batteries, nickel, copper, right? And then, you know, you ship them to China, you package it all. And then you transform these same products into like battery materials. And then and then guess what? Then you got to send it back to the US for for them to, you for manufacturers to bring a Tesla or an EV. So there’s a lot of CO2 emitted in actually the production of these EV.
Jason Jacobi, CFP® (36:43.278)
Tesla’s or
Mark Boyer (36:53.121)
you know, products and vehicles that, you know, a lot of people don’t think about. And you and I, we and I kind of heard something on this recently. And it was like, I think the number was for a Tesla that a to break even on CO2 emissions on a Tesla. The Tesla has to drive at least 40000 miles to here to just the break even point to be carbon neutral.
Jason Jacobi, CFP® (37:07.84)
You had to be carbon neutral, yep
Mark Boyer (37:22.817)
And it’s kind of the same idea with hydro wind farm, all that stuff, right? So all the production to build it, CO2 emissions, you know, now once you have the car, great, it’s a beautiful car, you know, no complaints with Teslas, but you’re going to have to drive that at least 40 ,000 miles before you’re actually starting to be, you know, reduce carbon emissions. So, you mean that’s crazy thought, isn’t it? We don’t think about a whole lot, right? So.
Jason Jacobi, CFP® (37:25.07)
Mm
Jason Jacobi, CFP® (37:49.946)
And then we haven’t even gotten to the point of battery. You have to replace a battery every X amount of miles. That means the whole process starts over again. So again, it’s about being smart and realizing, hey, this is all great technology, but let’s not mandate, let’s not put the government oversight and the hammer on everything else just because you want something to be a certain way. Like you said, capitalists, that’s why capitalism is the greatest economic system in the world.
Mark Boyer (37:58.017)
It’s interesting.
Jason Jacobi, CFP® (38:18.446)
because like you said, the consumer will drive that and which way it wants to go. And that’s going to fuel growth and innovation and help push our economy forward. So. Yep.
Mark Boyer (38:26.625)
Yeah. Yeah. So to wrap it up, I think for us, you know, part of the reason that we picked this this week is that, you know, we’re seeing a little movement in the oil stocks probably is going to my guess is it’s going to continue the summer. I mean, we’re going to see higher gas prices into the, you know, a lot more travel. You know, I heard some numbers about, you know,
Jason Jacobi, CFP® (38:48.334)
Thank you.
Mark Boyer (38:51.517)
jet fuel consumption right now is still really low compared to pre -COVID pandemic times. So that hasn’t even gotten back up to its full might be because Boeing, you know, these, maybe because we’re afraid to fly anymore. What’s happening? I don’t know. But, you know, so all that said is that, and then with the inability to ramp up quickly, you know, having, having shut down some refineries and things like that, you know, there’s a real,
Jason Jacobi, CFP® (39:01.182)
Yeah.
Mark Boyer (39:21.089)
There’s a real argument you can make for higher oil prices, you know, back to, you know, I don’t know, 100, 100 and plus, you know, barrels. We’ll see. I mean, I’m not saying that for sure, but it looks like it could be and thus, you know, might make part of a portfolio, a place where you want to, you know, put a little money into some of those types of investments.
Jason Jacobi, CFP® (39:43.214)
All good points, Mark. Always great to sit here and chat with you. And we’ll be with you next week on the closing bell with a different topic. But until next time, salt and pepper. We’re here. We’re spicy for savory. You love it. See you next time.
Mark Boyer (39:54.719)
Alright.
See you then.
