December 8, 2021

OAN Tipping Point with Kara McKinney and Jay R. Young, CEO, King Operating Corporations, talk about the Democrat Hearings on oil.

Thank you Kara McKinney and the OAN team for having a great discussion about the Democrat blame game they are playing. The record shows that the more we go “Greener” the more fossil fuels we will use. 

The following is an automated transcript. We disavow any mistakes unless it makes us funnier, or smarter. 

Kara McKinney, OAN, Tipping Point [00:00:00] Fossil fuels, they say, play in causing climate change. So what is the Democrats’ real goal here and what is it going to mean for American consumers moving forward? Joining me now to discuss is the president and CEO of a Texas oil and gas company, King Operating Corporation, Jay Young. Thanks for joining us tonight, Jay. Appreciate it. So what do you make of these congressional investigations going on right now?

 

Jay R. Young, CEO, King Operating Corporation [00:00:23] Well, I’ll tell you, I mean, it’s all about supply and demand. It’s about how much oil are we going to use and how much are we producing. And because of the holdbacks that we’ve had, the pipelines, the permits, everybody’s heard all this, you know, because of all that and because of a lot of different companies that are under the greener enough coined the term greener instead of green.

We’re going greener in the future. You know, we’re just not drilling for oil and gas. And if we don’t drill for oil and gas in the future, what’s going to happen is when we need it and we don’t have it, we’re going to have to go to other countries to get it. And I’m afraid it’s going to be a little more expensive over there. That’s what’s happening today. I mean, look at California.

Look at Germany. They put in this, Oh, we’re going to go green in the future. We’re going green, green, green. And all of a sudden, whoa, wait a minute. They’re paying more for gas in California, up to seven dollars a gallon in California. They’re paying astronomical prices in the UK right now. All because they don’t have the oil and gas that they needed. They didn’t look at it two-three years ago going, OK, so if we stop all this drilling, we’re not going to have the oil, and that’s exactly what happened.

Kara McKinney, OAN, Tipping Point [00:01:38] Yeah, we can still go ahead.

Jay R. Young, CEO, King Operating Corporation [00:01:43] I will say that, you know, the rig count down and because rig count down and because of a lot of people going on boards right now, you know, there’s a lot of people that are going on boards that are, do not drill, don’t drill, drill, drill. And because of that, we’re not drilling as many wells for oil and gas.

I mean, look at Exxon. Exxon makes $6 billion. Last quarter, they piled $10 billion, not putting it back into where they needed to, where they would have, you know, 20, 30, 30 years ago, which, hey, let’s just face it, 20, 30 years ago, we were worried about ESG. We were worried about, you know, right there all the different natural gas wells that are flaring gas in the west in West Texas. We were worried about that before.

Today is a bigger challenge. We’re not going to produce as much oil and gas, but I’m afraid that when we do need it, we’re not going to have it. And that’s going to drive those gas prices up, which is exactly what you mentioned a moment ago. And we’re it’s a line item on your budget that is getting it’s getting higher and higher every time gasoline goes up

Kara McKinney, OAN, Tipping Point [00:02:51] and going off what you’re saying. You know, it reminds me of what’s going on in Germany, as you were pointing out, because I mean, in Germany, they’ve gone farther than us on the whole green energy thing. But now, with winter coming in, they need more coal to make up for the shortfalls of their own green energy policies.

And also now they’re looking for Putin to come to save them with the Nord Stream two pipeline. So it’s absolutely insane. We’re all of these leads when it’s actually put into practice. And I know since your company is in Texas, I mean, going back 10 or so years with the shale oil revolution, the Permian Basin, and everything was, you know, really moving and grooving in that part of America.

How has everything that’s gone on since the pandemic and now Democrats and all their policies as you’ve laid out? How has that affected your company?

Jay R. Young, CEO, King Operating Corporation [00:03:31] Yeah. Well, it’s a great question. And you know, seriously, the last couple of years have been really hard for us to get capital for us to get our partners in. We’ve got all the gas funds that are tax-deductible and monthly income checks. Our cash flows are exploding right now, all because of the price. The price is going up.

You know, so if you drill baby drill and you’re doing like Trump says, where you’re drill, baby drill, drill rig counts a thousand rigs or twelve hundred rigs or whatever, man, we have so much oil on the market, so prices are going down. But for us and our partners and what we do and our prices are going up, it’s great for us.

Our clients are loving this right now because they mostly value checks are getting higher because we’re not drilling as many oil and gas wells in the United States. And when we don’t and we pull back, which we have, I mean, just think about it for a second. You know, before the pandemic, Saudi

Arabia and Russia, dumped a tremendous amount of oil and our markets in the United States because they wanted to put us out of business. They said You know what, we want to put you out of business. So they dumped all this, all the market in the United States.

Why? Because they wanted to oversupply us, drive down the price of oil. So then they could come in and rescue us later on. Well, Ben, does that ever happen along with the pandemic? So it killed our demand. Our supply was we were oversupplied, our demand was down. And of course, oil prices went down to negative numbers. But if you look at it right now, you’re seeing that we’re not even halfway home with the number of rigs that we’ve needed in the future to get that production back up 14 13 to 14 million barrels a day.

That’s where it’s comfortable. From our region, we can get old prices at 30, 40 dollars. You know, your gas tank, it doesn’t cost, but you know, thirty-five dollars to fill your gas tank instead of 70 or 80 or 90, you know? But for us, as a company or a private company, you know, we like oil prices to be a little bit higher because it’s better for our investors. And, you know, and it’s just better for us and our investors that we don’t want prices to go crazy at one hundred and twenty forty like it did with Obama.

And we hope it doesn’t go up there, but I’m afraid. Yeah, I’m really afraid that it’s going to get there. I think that’s really afraid that prices will continue to go up because we don’t have the oil in President Foods already, said the Financial Times. He said I guess what? I’m ready to replace every barrel of oil that President Biden isn’t ready to produce in the United States. I’m ready to replace every barrel. And of course, he’s saying the same thing to Germany, Germany right now, as you mentioned.

I mean, he’s just letting it go that he’s saying, Oh, this is perfect. They’re playing right in my hands, you know, and they’re going to need oil. They’re going to need gas, and I’m the only one that has it. I’m afraid this was going to happen.

Kara McKinney, OAN, Tipping Point [00:06:37] And that’s what I think so many of us are afraid of because we think, you know, where’s the ceiling on this thing? You know, you go to the gas pump every couple of weeks, it’s going up and up and up, and a lot of people are thinking, you know, where are the brakes on this? You know, when does it stop? And, you know, going back to something you touched on earlier, I mean, a few weeks ago, we saw Biden himself come out and he pointed the finger at people like you and other oil companies.

And you say, you’re the problem. You’re the reason why, you know, regular Americans are paying more at the pump. But as you were elaborating on, you know, there’s so much politics going on behind the scenes. And what do you think? Should we do what the US should be doing right now to help bring down the price of oil and also to increase production since we’re still not at where we were pre-pandemic?

Jay R. Young, CEO, King Operating Corporation [00:07:16] Yeah, good question. And I’ll tell you, one of the biggest things we need to do is like, we’ve got properties right now that we could drill. I could have a rig running in Colorado right now. It is an incredible project and it’s done we love to do, which is to drill for oil and gas, and we can’t do it.

You know, so I know there’s us, there are other companies out there that would love to do it, but the restrictions are too high. I mean, you got to spend hundreds of thousands of dollars to be compliant before we can put in a permit. You know, like in Texas, we have to do that. You know, also in Oklahoma, we have to do that. But in some of these other places, you know, that is getting so hard to drill for oil and gas. And I understand we are going to go greener. But I tell you what’s happening is, they’re going overboard thinking that we’re not. We don’t need this much oil and gas, and they don’t understand the supply and demand and the drill rig count. How many raised nearly 600 rigs, at least 600 rigs working to keep that price down to keep the supply coming.

Because if you don’t have that supply and you need it and you have to go to other countries to get a lot of it, and if you do, you know they’re going to take advantage of you and you’re just not going to have you’re not going to have what you need to keep your prices lower, which is what happened in Obama. It’s going to happen with Biden. We’re not going to anybody’s drilling for oil or gas. And as these and all and gas well, you know, it produces the most when it comes on the first month, it produces the most oil in the first 30 days. After that, it declines your shell wells. And I mean, Shell and sage ala ULA declines at a faster rate than a lot of other wells. So what happens is you have a well that comes on, you know, two thousand barrels a day. It produces 50 60000 barrels. The first month it let me down to 30 40 thousand, the second, third, fourth and declines over time. So if you don’t replace that with rigs down the road, what happens is, oh, well, look how much oil we’re producing. Our supply is going down and our demand is going up.

And when that happens, you know, it’s basic supply-demand when you need the oil and you don’t have it and you’re going to have to pay more for it because you simply don’t have it. Need in the United States, we need less rate, less lesser set of work, lesser regulations because we know we need to keep these pipelines open. You know, we’re going to go greener in the future, but we’re not going to see, you know, peak demand for oil in the next 10 years, the next 10 years. I’ve heard a lot of stories like that.