Chris Wright is the CEO and chairman of Liberty Energy, a Denver-based company that provides hydraulic fracturing services to drillers. In his second appearance on the podcast (the first was September 22, 2020) Wright explains why his company’s Bettering Human Lives report is the right response to the ESG movement, how the current administration’s anti-hydrocarbon efforts have increased profits in the oil and gas sector, the mechanics of the hydraulic fracturing process, and why propane — “the most-mobile hydrocarbon” – provides an answer for the 2.5 billion people today who are still using low-quality cooking fuels in their homes. (This episode was recorded on January 9, 2023.)

Episode Transcript

Robert Bryce 0:04
Hi, everyone. Welcome to the power hungry Podcast. I’m Robert Bryce. On this podcast we talk about energy, power, innovation and politics. And I’m pleased to welcome back Chris Wright. He is the CEO and chairman of liberty energy for the second appearance on the power hungry podcast. Chris, welcome back.

Unknown Speaker 0:20
Thanks, Robert. Great to be here.

Robert Bryce 0:22
Now, you know, you’ve been on the podcast before guests introduce themselves. So you have a long CV, you’re the CEO of this publicly traded company, but I’m gonna let you introduce yourself. You have about 60 seconds go.

Chris Wright 0:34
All right. Well, I am a career energy nerd from you know, high school all the way through education and my career. So I’ve been a lifelong energy nerd and a lifelong entrepreneur started a number of different businesses all in the energy industry. You know, I work today dominantly in oil and natural gas. I also work in geothermal and heck, in my past, I worked on nuclear and solar. So I don’t care where energy comes from, as long as it makes people’s lives better. It’s reliable, affordable and secure.

Robert Bryce 1:04
Okay, that’s good. And succinct. So we were we last talked in September of 2020, which seems like a couple of lifetimes ago. Now. You had liberty head. Liberty, I’ll put it I think you would agree with struggling you’d taken over some oilfield services assets from Schlumberger. What’s happened over there? How have things changed over the past two years? Bring us up to date?

Chris Wright 1:28
Yeah, well, last time we talked, we were a few months into the COVID disruption, which really caused obviously a huge contraction, short term contraction demand for oil and gas, hence, a contraction in the demand for frack services to bring new oil and gas production on. We had just announced that we were that we were taking over slumbers A’s practices, it was the second biggest practice in the world. At that time, we were the third biggest crack business in the world. Now we’ve combined those two business weights still liberty, but we folded a bunch of Schlumberger assets, technology and people into our company. So liberty is a bigger company. Now we’re more than a billion dollars a quarter on run rate revenues. So we’re 4500 employees, we frack about 17% of all the wells drilled in the United States in Canada. So as I like to say, when you translate that through to how much energy that means, it means about 8% of total US primary energy production, all sectors comes from wells backed by Liberty, so roughly twice as much energy as the entire solar and wind industries combined. And we’re passionate, we love what we do. So we drive hard.

Robert Bryce 2:41
So repeat that again. So 8% of us primary energy, so we’re producing it. So in rough terms at about 100 quads, I mean, it’s a little less than that now 100 Watt, 90, exa joules, something like that. So you account for 8% of all of that, almost in the neighborhood of eight 10%, something like that. Exactly. 8%

Chris Wright 2:59
of all primary energy use in the United States comes from wells that were fracked by Liberty. So these are excellent wells, or Chevron wells or oxy. So there are other companies that are ultimately selling this energy. But the single biggest piece of producing oil and gas from shale is frack It is the largest and most critical piece, simple math on that, Robert, as I’m sure you know, we are at a record high market share for the amount of US energy that comes from oil and natural gas. It’s not a surge in hydrocarbons, it’s just natural gases displacing coal, and hydrocarbons have been dominant for quite some time. So 70% of us energy comes today consumed energy not produced, consumed energy comes from oil and natural gas, about 70%, a little more than 70% of all oil and gas production comes from fractured shale wells. So there’s 50% of total energy, and about 15% of that 15 to 17% of all shale oil and gas production comes from wells backed by Liberty. So there’s that math, but just to appreciate the scope of what we do in terms of total energy impacted.

Robert Bryce 4:09
So then how many wells does that translate into per year? Then, Chris, how many wells? Are you fracking on an annual basis?

Chris Wright 4:16
I gotta do the quick math on that 828,016 debt. But that’s, that’s 2200 to 2500 wells a year.

Robert Bryce 4:29
2200. Okay, gotcha. So I was just looking at your financials, your revenue. I know, CEOs don’t necessarily, you know, we’re not on an earnings call. Your revenue roughly doubled since the fourth quarter of 2021. In that quarter, you lost 56 million instead of losing money. You had about 150 million in net income in the third quarter. Is that was that your best quarter in history? Are you going to exceed that the project for the final quarter of 2022?

Chris Wright 4:56
Well, that’s definitely the best quarter in history. And the tail wind is still blowing. So yeah, our business is continuing to grow and continuing to improve. Fourth quarter, there’s holiday impacts and shutdowns and all that we have a report in our results. So I’ll, I’ll remain silent on that. But yeah, business is very strong right now, it’s very strong for a couple of reasons. One is that we’d say we’re better than our competitors. So the demand for liberty is greater than the demand for fracking in general. So we’ve been slowly grabbing market share from that, and being able to work with the best oil and gas producers out there, that helps efficiency that helps throughput. And the other reason is, you’ve got this, and I’m sure we’ll talk more about this. But we’ve just had eight years of underinvestment in global energy system, mostly eight years of underinvestment in oil, natural gas, the infrastructure to move them. And I can say the same thing about coal. And so this underinvestment is in theory attack on our industry, or ESG, we gotta fix the world and make corporations produce less hydrocarbons. This is just nonsense. It doesn’t change the demand for energy at all. But by reducing the supply or putting these hurdles in the way of supply, it just makes prices go higher. So as I say, Look, this is driving us to record profitability. So sort of the anti oil and gas administration, not just our federal administration, but across the states, in this corporate movement against oil and gas, it may make those people feel great, but it’s driving record profitability in the oil and gas industry. So it’s great for that 1% of the population, but for the other 99% that are not in the oil and gas industry, but are consumers of oil and gas, we’ve artificially inflated prices, we shouldn’t be doing this. You know, it’s

Robert Bryce 6:39
interesting, because that was one of the things I’ve written down here that talking with people, you know, I’m from Tulsa, no, you know, growing up there. No, no fair number of people in the oil and gas industry and what you just said, I’ve heard from several different people that, in fact, instead of being bad for the oil and gas sector, that the Biden administration’s anti hydrocarbon policies have been great for. I mean, when one fellow I know he’s never made as much money in my whole career, as I’m making now that this and these anti hydrocarbon policies are in fact, having the opposite effect of what presumably was, was intended by these anti hydrocarbon policies, restricting drilling and leases, etc. I mean, it’s kind of I mean, I’m not gonna say it’s funny, but it’s it’s not it’s certainly not a predicted outcome. I mean, how do you see that? And is there any irony here?

Chris Wright 7:27
Oh, it’s very ironic. Of course, it wasn’t predicted outcome. I mean, I’ve been saying that for years. If you do stuff that makes it harder to produce oil and gas, all you’re gonna do is make the price higher. And maybe you can displace production from the US to countries overseas. But you know, do and of course, you’d be displaced US production to overseas, you’re going to have larger environmental impacts on pollutants as well as greenhouse gas emissions. And with prices higher, you’re just going to impoverish everyone. There’s nothing green or attacking climate change about those policies. But they sound that way to politician. It sounds good. It sounds green. It sounds like they’re climate warriors, if they’re if they’re making it harder to develop oil and gas, but it’s none of the above. Because none of that changes the demand for oil and gas, right? Do oil and gas make the world go round. Humans want better lives, they want higher quality of lives. That’s what drives the demand for oil and gas. Taking more solar panels, putting subsidizing more solar panels up somehow is going to reduce the demand for oil. It’s just total nonsense. Number one, it’s small wind and solar today are less than 3% of global energy after trillions of dollars of subsidies over two decades. Number two, it’s all in the electricity sector. Electricity is only 20% of global energy. And oil, very little oil is used to produce electricity, oils for transportation for making materials for manufacturing. So solar does almost nothing for that. So we’re like subsidizing one area, we’ve got an interest group here that’s making more money. But the net impact of that of wind and solar subsidies, the main impact is just to make our electricity grids less reliable, and electricity prices more expensive, and to do nothing for the demand for oil and very little for the demand for natural gas.

Robert Bryce 9:14
So it’s interesting that you sit down I’m sorry to interrupt, but it’s just you know, I’ve been hearing this over and over and I’ve written about this lately. In fact, you know, the New York Times The New Yorker, all you know, all this oh, well, the attitude among these NGO climate groups seems to be well, any solar panel and any wind turbine is good solar panel and a good wind turbine, because somehow they’re inherently better and that somehow this is going to make some difference in climate change. But I think your point there is absolutely critical in that, well, they’re going to affect some part of the electric sector, but the electric sector is only a fraction of the overall story and it doesn’t affect liquid hydrocarbon demand, which to me seems to be the absolutely most most difficult challenge in decarbonisation. And I sounds like I mean that that thought it seems like it’s rhyming with what you’re saying,

Chris Wright 10:05
Oh, absolutely no, no that that that spot on. It’s one of my problems. And I’m sure you share this concern as well as what we’re doing sort of in the name of climate change a, there’s just zero chance we’re gonna get to net zero or remotely close to it by 2050. There’s just, we don’t have the technologies or things to do it. It’s a giant money suck for, for wealthy companies are going to get all sorts of crazy subsidies to do things for them. But it’s not going to meaningfully change greenhouse gas emissions by 2050. We really need better energy technologies and a different energy system to do that. The other thing is the policies we’re driving are not really about decarbonisation, and the US we’ve got the best data over 60% of the of the relatively large, relatively large reduction in US greenhouse gas emissions comes from one source, it’s just natural gas, displacing coal in the electricity sector, that’s over 60% of the reduction in US greenhouse gas emissions on a per capita basis to lower than any year that I was born. So look, that’s the needle mover we have today. But is there a push to get more natural gas production and drive that to displace coal around the world? Absolutely not. We’ve had slow boating, on natural gas export terminals, restrictions on permits, you can’t build more natural gas pipelines out of this things, things that we know can drive down greenhouse gas emissions, those are popular nuclear, right, that’s the other potential big needle mover is to drive more of our electricity from nuclear. No, that’s not embrace. That’s not that’s a push. It’s wind and solar, which are not meaningful drivers of decarbonisation, just because their energy is diffused, it takes a lot of land a lot of materials let an energy to build them. And then they produce a relatively low value, intermittent electricity source, the other big and also, the other big source of so called Climate efforts, both in that federal and the state level is electric cars, like these are even crazier, Volkswagens published good data on this as a number of hazards. Well, it’s way more energy intensive. To make an electric vehicle than to make an internal combustion car, you’ve got to drive it 70 or 80,000 miles just to get to break even, just to not have more greenhouse gas emissions from an electric vehicle vehicle than an internal combustion engine. If you ever seen an electric car with 80,000 miles on it, I haven’t I’m sure we’ll get to some. But really what they’re doing is just displacing gasoline demand into diesel demand. Diesel is what powers mining and the ships that transport the stuff around the world to China to be processed over here. It’s substituting gasoline demand into coal demand, which is what powers a lot of the industry in China and Asia where these things are made. And he’s pushing into natural gas demand, which is by far the biggest source of electricity in the United States, and the second biggest source of electricity globally after coal. So you’re not reducing hydrocarbon consumption with electric vehicles, you’re just moving around which hydrocarbons go into that. But yet it’s endlessly promoted and subsidized for climate reasons. Like the math just doesn’t support that.

Robert Bryce 13:19
Well, it’s interesting, you bring that up, because I have a new book that I’m gonna have of this guy on the podcast, Glenn Duckett. He’s was a professor at Texas a&m, and he makes this point about natural gas, that is better to use natural gas directly than indirectly and through a heat pump or something else is twice as efficient. That using it indirectly burning the gas to power heat pump or something else emits twice as much co2 as using it directly. But I digress. Well, so just a couple of quick things. The last thing is about liberty as an entity. So who are your biggest customers?

Chris Wright 13:52
So our biggest customers are the biggest oil and gas producers. You know, we don’t disclose that publicly. But if somebody’s a large oil and gas producer in the United States, they’re likely a large customer of liberty. Think of think of that market share we have. So most of the names, you know, that are producing oil and gas or Liberty customer, some are bigger than others and all that. But we are partners with them again, in trying it with the shale revolution. We’re using less land and better economics to extract more energy to make the world go round. So to me, obviously, it’s a it’s an honorable process that I’m very passionate about because it betters human lives. But yet we have all this political opposition people say are you hurt by that? No, I’m not hurt by it because it’s nonsense. But I am frustrated that it’s the main information that the average person hears so hands have engaged in this trying to bring some energy sobriety just like us.

Robert Bryce 14:43
And so what about your biggest competitors, you can reveal who those are? Would that be Baker Hughes would would have been Schlumberger Halliburton, those would be your main competitors in the height in the oilfield services space.

Chris Wright 14:55
Well, Baker Hughes is also not in frack. So Halliburton is the is the big Is Pratt company out there Liberty would be second. And then there’s a few other public companies that are that are that are close behind a company called Pro fracture company called next year company called Pro Petro. That would sort of be the big five companies in hydro hydraulic fracturing, there’s probably 25 cups companies in FRAC. So it’s a highly competitive business. And a key part of that. And Robert, I don’t know if we’ll talk about this at all today is for us to have our competitive position, we have to make this the best place to work, right to have the best company got to have the best people, you got to have them stay around. So we have very broad ownership in our company, we’ve probably had about 1000, employee owners of our business, but people that are running our frack crews out on location, they’re part owners of the business. And then we just have all sorts of things that just simply make our company a better place to work. We treat people with respect, we devolve responsibility to tip of the spear. Heck, we have an IVF and adoption support program, we’ve had a number of babies that wouldn’t have come into this world, if not for Liberty subsidies, or some financial support for IVF for adoption. We want people to have great fulfilling liberty, opportunity, opportunity and liberty rich lives. And so if you walk that walk not just externally, but internally in your company, you get great people and you have a chance to have a competitive advantage. That’s the Liberty story in a nutshell.

Robert Bryce 16:26
Well, I want to come back to the Labour Party in a minute, but I’m one of the things in in more than two years or more now than since we talked, you have published a report called bettering human lives. And it seems like this is you’re countering ESG. And this interests me because it appears as I would say the flip the script, that you’re you’re trying to turn the ESG rhetoric on its head. So tell me about what why why did you start this bettering human lives report and what hasn’t been successful? And what do you hope to succeed? Or what do you hope to achieve with it? Yeah, so

Chris Wright 17:05
I think you said if you have fairly look, I’ve been outspoken on energy and sobriety and climate change. I’ve been speaking about climate change for 20 years long before I started, started the company liberty. So I think understanding how the world energy system works and understanding climate change, it’s a real thing. I mean, it’s a real thing. It’s global. It’s gonna take technologies or whatever to address it. But it’s a slow moving, modest problem relative to so many other giant and urgent problems today. So that sort of broader, sober message has always been of interest to mine. But yeah, as we went public, there’s this pressure, you’ve got to produce an ESG report, you’ve got to produce an ESG report. And as you look at people’s reports, and the people who are driving this movement, we want to make companies care about the environment, we want to make them socially more virtuous. And the GE, I think, was a great marketing thing they put in GE Yes, of course, you should have good governance for a company. And that’s pretty simple. You’ve got to align the interests of management, the people inside the company, with the owners of the company, the public stockholders, And have there been flaws with governance in the energy space or the corporate space. Yeah, absolutely, I think shining a bright light on that, that people should not be acting in the interest of themselves. But in the interest of the owners of their companies, that’s a great thing. But Ge, I think was just sort of thrown in as a marketing thing. In the energy space, it’s mostly been about the E, and it’s dominantly been focused on climate change. Even on the social side, it’s been we’re gonna give a bunch of boxes for you to count up people that fit in these categories, we’re going to ask you, it’s like top down defining of what’s virtuous, like this is just to me nuts, an upside down, two things really changed the world. In the last 200 years, human life expectancy is more than doubled, driven by two things. And two things or two things enabled everything else. One was the growth of bottom up social organization, human liberty, not top down, you know, before we had, there’s a king or a queen or achieved for an emperor, and people were subjects of some ruler from above. And it was this empowerment of people from the bottom up, that has made our world so much better ending of slavery, giving women the right and franchise men and women to get the right to vote. All these things are wildly recent events. It’s appalling the way things used to be, but that’s just the way the world rolled. But two things change that social organization of bottom up organization and the arrival of hydrocarbons. And in fact, some great some great authors have written Ian Morris, I would say a classic scholar Stanford intellectual has written it’s the arrival of fossil fuels themselves. That enabled bottom up social organization that enabled the end of slavery and women getting in franchise men earned the right to vote and all the other positive social changes. I’ve always had it’s the other way human liberties first energies of follow. I’m getting convinced the role of hydrocarbons was much bigger than I originally understood in the growth of human liberty, and the empowerment of individuals to any case, these two things are just awesome. They brought us planes, trains, and automobiles, and modern medicine and the internet and all these things that make our life the way they are. But now to have an ESG, a corporate ESG movement that’s mostly focused on opposing these two things. It’s against hydrocarbon production, those are the companies we we, we attack or we don’t believe in, or we only invest in them, if they change their practices. Now, they can change their practices to do things better and reduce greenhouse gas emissions without killing the economics awesome. I’m all favor, all in favor of it. And of course, our industry has been doing that our entire history. But if you’re going to oppose hydrocarbons, on principle, and you’re going to define from above, what’s virtuous, you know, some people on the coasts are going to define what’s virtuous around the world. That’s just nuts. That’s that’s against human progress. So yes, I,

Robert Bryce 21:01
if I can interrupt because you one of the people, we know John Constable has made this very point that it wasn’t the Liberty given to the peasants to the to the working class wasn’t some gift that the nobles gave no, it was the arrival of hydrocarbons and the ability of the lower classes to use hydrocarbons and improve their station that led to more liberty, it was the energy availability from coal and then later from oil and gas, that enabled people more freedom, more freedom of movement, etc, that that was what catalyzed more liberty, it wasn’t the other way around some benevolent dictator saying, Oh, I’m gonna give these people No, and that it was, in fact, their availability of lower cost energy, that that freed them from having to work on the land and gave them more more social mobility. So I’m just throwing that in, because I think, you know, constable’s work kind of opened my eyes on this. And he’s been a guest on the podcast, and I know he’s coming to Denver, to talk to your company as well.

Chris Wright 21:55
Oh, John has been great on this topic and effect, and he’s pointed to me a number of books, and I’m blanking on the guy’s name, Anthony, Tony, I’m forgetting his last name. He’s written a couple of great books about the changing of the energy system. And yeah, the industrial revolution really wasn’t a revolution. It was a gradual process. But it was just the growth of coal in the in the power system. So early on in England. You know, by the time of Shakespeare, England already got 50% of its energy from coal. And I write about this and bettering human lives. The report I wrote this year, I talked about even before that, the first sort of like glimpse of a modern society was the Dutch and the Dutch Golden Age, the early 1600s. And it was driven by peat, peat bogs, which sort of immature coal and they could dig up and burn this huge energy source allowed them to make glass and ceramics and better farm tools, and dramatically raise their income drove to trade. And of course, as societies get wealthier, power gets distributed widely. So yes, energy’s role in driving this human liberty, empowerment of people from the bottom up energy was certainly a major player, if not the dominant force in doing those things. So what Robert We’ve just lost that understanding, we’ve just lost that understanding as a society. So

Robert Bryce 23:15
let me let me interrupt that well, then why is that because I mean, you know, I look I’ve been you know, people have you know, I’ve been attacked for you know, my my promotion of cheap abundant reliable energy, right. This is one of my things I’m you know, I’m I’m for people who turn wrenches, I’m for the people who make things and fix things and grow things. Those are my people. I’m from Tulsa, you know, these are the people that I’m in favor of, but there is a class of, I’m going to call them you know, the, as you said, the coastal people, right, and the, from big university, elite universities who don’t seem to make that connection. Why is that connection lost between this connection between cheap energy? I’ve had people here in Austin, you know, people, I’ve been acquainted with all energies too cheap, we should make it more expensive. And I thought, Oh, really? I mean, it’s easy to say that if you’re rich, but but why is that? Why is that connection been lost? I think that’s a really interesting point. Why do you think that’s been lost.

Chris Wright 24:06
So first, in low income countries, and I spend a lot of time there, it’s not lost at all. Everyone gets they want lower cost energy they want they want an indoor clean cooking stove instead of wood or smoke in there. So most of the world is quite sober on this. But yeah, in the well off, people in the well off countries are sort of the source of this problem. And that and I’ve got a lot of different reasons for it. But one of them think of it this way. If you’re a university professor, you’re you’re an academic or you went to a top university. Too often they feel a little better, a little smarter than everyone else, and you want to do something with that. If you’re not an entrepreneur, if you’re not doing something, what are you going to do? You’re going to design a society that makes everyone better and fairer, you’re going to take care of those people who don’t know how to make the right trade offs and those right decisions. So it’s just a perfect empowerment to You will for top down,

Robert Bryce 25:01
look to turn. So it’s paternalism. It’s very paternalistic,

Chris Wright 25:05
and it begins. Look, it began, when did when did climate change in this movement take off? At the very end of the 80s and early 90s, right after the Berlin Wall fell when I was in college in the 80s, right? A third of the professors were avowed Marxists. Because you know, you believe that smart people should dishonest so he’s haven’t got it right yet, or the Chinese, maybe they’re gunning, but I mean, it was you were outwardly for that when the Berlin Wall fell, the Soviet Union collapsed, he couldn’t really be a Marxist anymore, you know, and so people became environmentalists. Now, some for good reason. They want cleaner air and water and all that, heck, I’m a lifelong environmentalist, and that sense of the word, but it became the reason for top down control. You know, this is a way if climate change is the existential threat of the world that government advised by these intellectuals have to redesign society redesign the energy system, pick new winners, pick new losers decide who’s virtuous and who’s not virtuous. This is incredibly empowering. I think that’s the main driver, like when I speak at universities, or people over beers afterwards, you say, Yeah, Chris, you’re right about climate change. I mean, I, ya know, we give it over emphasis, but that was money comes from, that’s how we can get money to do our research. And to students, its meaning, right society was mostly faith based throughout all of human history, and then we’ve rapidly become a much more secular society. Everybody wants to be part of something bigger than themselves, not just you know, a bigger car a nicer

Robert Bryce 26:38
secular, it’s a secular? Well, I’ve said this before, it’s just for secular religion, then it’s become

Chris Wright 26:44
it’s become a religion, it gives people meaning, and the winner, but I don’t want I want to, it’s, it’s people searching for meaning. When I speak at universities or high schools, people are pretty easy to move away from climate mania, not 15%. But the people in the middle, they just all they’ve heard is, this is the biggest source of disasters, a web, blah, blah, blah, they just believe it, because they haven’t heard otherwise, if they hear otherwise, most people are like, wow, I just didn’t realize that, like this is a very changeable paradigm, as long as it’s accompanied with some other way to bring meaning and help in the world.

Robert Bryce 27:23
So it’s about framing, it’s about framing our place in the world, reframing away from the secular idea about, about sin and redemption toward one as your as I’m jumping ahead here, to bettering human lives and seeing energy in the energy systems as being actually pro human. And that that is the goal that we should be pursuing.

Chris Wright 27:45
Exactly the average young person in high school or college, they want the world to be a better place they feel they know they’re pretty lucky and they want to lift other people up, that gives them meaning it gives them drive. And right now they’ve got this simple off the shelf world, industrial civilization, hydrocarbons are destroying the world, we’ve got to stop it to save the world. But when they realize that isn’t actually the case, and the biggest problem today is a third of humanity doesn’t have hydrocarbons, is still burning that get heating their homes and cooking their meals, burning wood and dung and agricultural waste. And that that kills 3 million people from that in, in indoor air pollution, that particulate matter that smoke in those hearts, when they realize that’s true. And they could save millions of lives by helping bring clean cooking fuel, just a cookstove like it, like someone we use for a backpacking thing in a propane canister. Like that’s the biggest lifesaver. We’ve gotten the world to bring health care, you need just basic, rudimentary energy in poor areas. When people hear that, I think they’re happy to swing and adopt that posture. But right now, they’re just so overwhelmed with climate change is destroying everything, the end is nigh. And they must dive in for this cause they want to cause they just don’t know that cause is not supported by facts. It’s not humanistic.

Robert Bryce 29:06
Let me let me just switch back to ESG because I had another guest on the podcast. Now it’s been some time Joe Kraft who’s the CEO of Alliance resource partners. So it’s a Tulsa based company. And Joe facilitated a visit to an underground coal mine, which was the opening scene in my fourth book power hungry. He mentioned that alliance as half of their bankers. And alliance is the second largest coal producer in the Eastern US that half of the bankers in his revolt that were providing a revolving line of credit to Alliance had quit providing lending to Alliance. Have you had bankers for Liberty back out because of ESG?

Chris Wright 29:44
We have there are people picking the European banks and HSBC just announced are no longer gonna lend for hydrocarbon development. But yes, we’ve had European banks in in Liberty’s credit facility that have either pulled out or we have one now who wants to get out At all costs, and it’s

Robert Bryce 30:02
on a percentage of your of your lending facility. What does this represent?

Chris Wright 30:08
Well, total credit in our space shrunk, meaning, you know, 20%, something like that 20 25% of banks are moving away from that. But again, Robert, that’s it. Think of these Liberty company is bigger and a more profitable business, we can get capital elsewhere, it isn’t going to stop us. The problem it’s going to stop is the small entrepreneurial businesses, that that private equity capital that mostly came from university and state pension endowments, that money moving away from hydrocarbons, were stopping and hurting the entrepreneurs, the small upstarts that are big drivers of innovation and competition. I always say a lot of businesses don’t like innovation, you know, they want to be entrenched, they want to have protection to their business. Big, big business loves big government, because it keeps competitors out. I don’t, I believe innovation and competition are just critical to bettering human lives. So think of this removal of bank capital Remover of private equity capital, it’s just reducing competition, reducing dynamism in the energy system. And of course, that’ll slow even the progress of we’re shrinking the footprint of hydrocarbon production, which is shrunk dramatically from innovations, mostly driven by small companies. We don’t want to shrink that innovation, we want to speed that innovation up.

Robert Bryce 31:29
So just want to make sure I’m hearing you though. So you have have you have had banks in your that are providing credit to you either in your revolving line of credit or long term capital that have pulled out it. Can you do you want to name names? Here he is, are you going to call them out? Or European?

Chris Wright 31:47
I named HSBC, which is, which has been announced globally, they’re going to do that looks socked in sock 10 is doing this.

Robert Bryce 31:58
Society generale, the French company?

Chris Wright 32:01
Yes, exactly. There’s a number of a good number of the of the European banks. Let me tell you something I think that’s that’s even more egregious, which is that, at the at not the last one and a half, the cop summit that was in Scotland, remember fall, just as the energy crisis was hitting pre Russian invasion of Ukraine. But as natural gas prices were were skyrocketing, 90 nations, including the United States, and the United Kingdom, announced proudly at that event, that they were going to cease assisting with hydrocarbon funding for development in the developing world, a third of humanity and 3 million deaths because they don’t have basic hydrocarbons. And the rich countries of the world said, we’re going to be virtuous. And we’re not going to, we’re not going to provide any credit or support for hydrocarbon development in developing nations. This is this is immoral. This is wealthy people saying we want to be hip at the cocktail parties, and therefore we want to slow the rise out of poverty of people around the world. This is just way beyond the pale. And good. Look, there’s US banks. And this I should be careful, you know, some of our existing bankers of mine that have announced their alignment with the Paris Accords. And I took them on for that. And they engaged in a great thoughtful dialogue with me, because they said look at the Intergovernmental Panel on Climate Change, right, the UN bureaucracy that drove the meeting and the Paris Accords, their own economic analysis show the Paris Accords, maybe they save $20 trillion dollars of damages in the world, but they cost over $100 trillion. So it’s an $80 trillion, human impoverishment program, their own analysis shows this makes the world poor and worse off that, which is an implicit we don’t support this, but yet we have a giant inner US based giant international financial institution saying they’re gonna align with the Paris Accords. I asked him, What’s your different analysis? How do you get to this as a thing that’s going to better human lives? And they said, No, actually, we didn’t do any analysis like that.

Robert Bryce 34:09
We specifically would be Export Import Bank or I guess

Chris Wright 34:14
this is this is one of the largest financial institutions in the world. This is a giant commercial investment bank, okay. Giant, high profile bank, who announced it with an awesome CEO who wrote a great editorial recently, Jamie Dimon. But this bank said, no, they they they pledged this movement to the Paris Climate Accords because they had a proxy battle against them. groups wanted to force them to do it. They fought against that proxy battle. They won that vote, but only with 50 some percent of the vote, they’re worried about losing a future vote. So they’re, you know, they’re trying to appease an activist group. But by trying to appease an activist group, they’re sending a message that even this smart super successful business, believe they When people hear is believe this is a way to make the world a better place, let’s align our lending practices with the Paris Accords, which doesn’t really mean anything anyway, since there’s no teeth in the Paris Accords, but what it really says is that reducing greenhouse gas emissions above everything else is our top goal. And that’s just someone who’s not looking at trade offs, who’s not looking at climate economics, and isn’t really speaking from a how do we better the world’s environment and the human lives in the world? That’s, that’s, to me, that’s just not honest.

Robert Bryce 35:32
So But back to liberty, if you don’t mind, I just want to press you a little bit on this point. So you said you have had banks pull out of your revolving line of credit or your long term lending? Is that That’s because of ESG?

Unknown Speaker 35:42
Yes. And your sister company, but yes,

Robert Bryce 35:47
okay. So not not liberty energy, they haven’t pulled out of your operation on you. Okay. But another company Liberty, liberty, I’m sorry, resources, limited resources, limited resources, okay, which is, which is an oil and gas producing oil production? Okay, so you and but your some of your banks have pulled out and you’ve replaced that with private equity, how have you how you filled that hole?

Chris Wright 36:10
domestic banks, domestic saying, okay, European banks that are doing this first domestic banks have tried to reduce their exposure to hydrocarbons. Now, when you sit back two or three years ago, you can say that was because the credit was struggled or the credit was challenged. But they would also give ESG reasons as well, it’s always hard to know how much is one than the other, think of think of the investment platforms, ESG funds and all that, you know, these really started in mass 22,015 1617. And what’s happened, energy stocks since then have cratered tech stocks have gone through the roof. So you could say, well, we were ESG, you know, Google and Amazon, because Amazon is by far the biggest energy consumer in the country, by far. You can say they’re green and ESG positive. But really just tech companies versus energy to the financial performance of those funds was awesome. If you look at the last two years, it’s the opposite. Right? Right, the energy production. So now you do have a quote unquote, ESG mandate, you’re actually really killing your financial returns. So you’re gonna see sort of a wholesale backing away from ESG. Really, you know, when this whole thing that like Exxon is evil, but Sinopec and China and Google are clean and green? I mean, of course, it’s, it’s it’s self contradictory. It’s, to me, it’s not a serious movement, but it has been an impactful movement. Hence by desire to write bettering human lives, to say if you’re going to objectively look at these things, you really want to make human lives better. You really want to make the environment greener, click cleaner environment cleaner, or you want quite the opposite. Hi.

Robert Bryce 37:55
Well, let’s go back to bettering human lives. So I didn’t have a favorite hydrocarbon until I saw that propane is your favorite hydrocarbon. So let’s talk about propane. Well, first well why so why propane I see three h eight I know the chemical structure what? Tell me what your love affair with propane. Why do you love propane.

Chris Wright 38:15
So I love propane, because it is the answer for two and a half billion people that are cooking today. As I keep saying with wood dung agricultural waste, it kills 3 million people a year, the people that are heating their huts and cooking their meals the same way our ancestors did. But from that indoor air pollution. The solution to that problem is a little cookstove and a propane canister. And hundreds of millions of people over the last decade have made that transition. It just means cleaner air longer lifespans, particularly for the women and children who are typically around these huts. They also spend about an hour a day gathering fuel wood. If you’ve got to produce a propane canister once a week, it’s got to be filled up but you’re not spending an hour a day gathering that. Um, if you have propane in a village, you could run a water pump and use groundwater and save an hour a day trying to gather water. So it’s basically the most mobile hydrocarbon that’s also very clean burning. In the US. We get most of these things from natural gas, but you need a big pipeline network and system to distribute natural gas. But in remote areas, my house in Montana, my ski house in Montana, it runs on propane, you go to farms in rural areas, they run on propane. So the answer to bring clean hydrocarbons to poor rural areas around the world is propane. That’s why it’s my favorite article.

Robert Bryce 39:36
Well, and it has those other it’s easy to tank and then it’s standard temperature and pressure you got you know, it’s mobile like you said, but yeah, there was one thing in the Brett bettering human lives report that I thought was interesting. I’d never seen this before. It said that US propane production has grown faster than oil and gas production. How’s that possible? Because you get propane from each from oil and natural gas

Chris Wright 39:58
and natural gas so they The shale revolution we’re producing this these things that have been incredibly impermeable rocks like shales like your countertop, right? It’s simple evaporate off it before it’ll flow through it. So we originally started this in natural gas, because that molecule is so tiny, that if you could get anything at a shale would be natural gas. So shale revolution started in natural gas. And for for almost a decade was only a natural gas changed the game of natural gas, but you can’t get oil out of these things, which is better shale technology. Better frack density better contact area allowed us to produce oil out as well. But you can’t produce heavy viscous oil, right? What’s the what’s the oil that we can get out of shale? Is that really light? It’s almost clear, and it’s almost like gasoline. It’s very light crude. So if you’re producing very light crude, what are the nearby molecules? butane, propane, methane, you know, ethane, methane. So propane is when we produce oil, we’re always producing propane as well. And as part of the heavy oil production doesn’t come with propane, and dry natural gas production doesn’t come with propane, wet natural gas production and very light oil is when you get propane. And the heart of the shale revolution is right in those two things. So yeah, US propane production has gone up meaningfully more than oil and all that. Another way I say it Robert was 10 or 12 years ago, 10 or 12 years ago, propane was also my favorite hydrocarbon. But the US was the eighth largest exporter of propane aid. Today, we export more propane, then number two through eight combined. So we’ve just been like 10 fold grown our propane exports and change the game as far as availability of this clean burning cooking fuel and Ted to low income people around the world.

Robert Bryce 41:52
That was another are a number in your report that was was really jumped out that half of the world’s propane exports are now coming from the US. Yes, yeah. And that and that and that wells fracked. By liberty, I account for 15% of all the propane produced in North America. That’s those are just a remarkable statistics.

Chris Wright 42:13
It’s the number I trumpet in a letter at the front of our report roughly, and we don’t know it’s actually a little less than 100 million to potensi. As much as 200 million people are getting clean cooking fuel today from wells frack by Liberty. That is the you know, our sort of global impact on by far the most proud of, and I think that companies in our industry should promote that more. Instead, they lead with they reduce their scope one greenhouse gas emissions by 4%. Well, scope one is like 1% of us greenhouse gas emissions and that you know, so it’s like point, they’re taking a tiny greenhouse gas category and making it a tiny bit smaller. Maybe that’s moving in the right direction, but that’s not bettering anyone’s lives, those same people are supplied and 10s of millions of people with fuel that make their houses cleaner, their lives longer, their lives healthier. Let’s talk a little bit more about that one.

Robert Bryce 43:10
Well, let me ask you about that. Because that’s one of the things that I’ve had Toby rice, the CEO of EQ T on the on the podcast as well. And as I look at the you know, I look at all you know, I follow nuclear, I’m following the coal business fo oil and gas, electricity. But when I look at oil and gas, I see and I’m not blowing smoke up your dress here that you and Toby are among the few few people in the oil and gas industry, maybe Harold Hamm, that are really vocal and really act I would say activist use a borrower use that word in saying no, this narrative that we’re bad is absolutely wrong. You’ve got this, you got to turn this upside down. Is it my question? Is this why I’m so other CEOs, people that are in at similar levels in the business to you? Why aren’t they speaking out more? Is it because they don’t have the backing of the board? Are they afraid of being attacked? Why? Why are? Why are there so few people like you and Toby doing what you’re doing?

Chris Wright 44:06
I don’t know. I mean, I’m working hard in that, Robert, and there is more of it happening today. But yeah, to me, it’s a small change. And I want a big change. Toby is one of the first people that contacted me when, when the first version of bettering human lives went out, he said this change my perspective, you know, thank you for doing this. And I hear that from most all the CEOs in our industry, but Toby has just leaned in and is you know, it’s got his way of telling a story. And it’s a great story. And he’s passionate. He’s doing a fabulous job. I want many more doing that many more doing that. Look, I’ll give you maybe a clue about why many more aren’t doing that. So I was going to I was asked to give an exclusive to a major US publication on this report that if they had an exclusive they’d write a piece about it right as I released it, you know, a year and a half ago, which is very much what I wanted, and then they read it and said, Wow, I can’t believe you wrote this, aren’t you worried investors are going to be mad at you people are going to be against your company? And? And my answer was absolutely not. Nothing in that report is not very true and fully referenced. And I’m ready to defend every word in it. So no, of course, they’re like, but this stuff is so counter, there’s no net zero plans, there’s no Paris Accords, there’s no, you say climate change is less important than these other things. And, and my answer to this major publication is that’s because it’s true. And and the fact that people are reversing those priorities, that should be the real story that’s just inconsistent with the facts. And it’s destructive for humans. Six months later, they came and said, you know, everything you said in that report is true. But they didn’t know that before that most people learn about energy and climate change what they read in the press, people in the press read what the other people in the press WRITE, and they write wrinkles on the same thing. They’re not very knowledgeable about energy, they’re not very knowledgeable about climate change, and they’re very worried to rock the boat. So I think most of the people in our industry say, Chris, thank you for taking all the arrows, you know, for doing this, you know, I wish I could do that too. And my answer is you can, and I’m not taking any heroes. If you speak honestly, and know what you’re talking about how someone’s gonna shoot an arrow. i When I’m on TV, Robert, I wish people would say, That can’t be true, there is an energy transition, or there is this or I want to be challenged, we want to fact based dialogue. But instead people are afraid they think climate change is this third rail, it’s like you can’t cut Social Security. No, it’s it’s a, it’s a real physical phenomenon that needs to be put in its proper perspective. Before millions of more people are have premature deaths because of high and unreliable energy. We need to engage on this. But people are very afraid to do that. I hope that changes suddenly the crisis in Europe and high energy prices is is moving things that way. There II there are some other speaking out Robert, including one of the biggest oil companies in the world. I’m seeing real progress there. And I think we’re going to see more of it. But it’s slow. I wish it was much faster and much bigger. It’s up to us.

Robert Bryce 47:10
So what do people I’m, again, looking at you’re bettering human lives report and digit FRAC. I want to ask you about digit FRAC. But just generally, what is the what is the general public? You’ve talked about the media and media perceptions, and I’ve been watching this, um, you know, been in journalism for more than 30 years now. 35 years? In fact, what do people get wrong about hydraulic fracturing? And why is that that whole thing about fracking has become, you know, this kind of code word for oh, that’s bad. You know, and it sounds like fucking so, you know, it’s got to be, you know, that there’s this what do people get wrong about it?

Chris Wright 47:42
Well, people think it’s a, it’s a worse, dirtier technology than previous oil and gas production technologies, oil and gas was bad before and fracking has made it worse. And of course, the reality is exactly the opposite. What’s so great about fracking is if you fly over West Texas and or drive through West Texas, you see, you see wells everywhere, right? Because with vertical wells, they have to be pretty close together, and you have to disturb a fair amount of land and produce it. You can fly over western North Dakota, and you won’t even see oil and gas production, you’ll just see farm and ranch land, less than 2% of the land has been impacted. But yet North Dakota produces more oil than five OPEC nations, and went from 39th and per capita income to six in per capita income. So what’s great about fracking is its smaller impact on the land. We’re pumping mostly water now much less chemicals, with centralized production facilities.

Robert Bryce 48:40
And there’s just a follow up just to follow up that much less land. That’s because you’re doing multiple you’re you’re you’re using multi Well, pads, right. So they’re the and this was, to me, seems interesting. And I’ll just point this out that that in that you point out the old vertical wells, you had to space them out, well, now the the goal is in fact to put the wells right close together and then send the wells down in the height of the horizontal laterals out in different directions so that the actual surface footprint is very small. So that was one of the other questions. What is the average area that frack pad or the Well Pat, is it a couple of acres, three or four acres

Chris Wright 49:15
of FRAC pads a few acres if it’s got 20 wells on it, you know, it’ll be seven acres you know, if it’s got three or four wells on it, it’ll be two acres. But that but there’s they’re small, like, there’s a Broomfield, a town just north of Denver here. Broomfield have like 56 vertical wells in it. Old completion technology trucks having to drive by and download the oil in this town had been an oilfield before was a town and now new wind new shale technology company called the extraction a Colorado based company went in there and plugged and abandoned all 56 of those wells and just made six new small few acre patches within the town in areas that weren’t habitated a right extra highway or somewhere where there was available land, then drilled wells to miles down three miles vertical in length. And like group production by tenfold hundreds of millions of dollars in the next 10 years, going into the school system and tax base of Broomfield and they went from 56 old oil wells sites to five. And those old ones were plugged abandoned, receded and they’re and they’re gone. So it’s like an incredible environmental wind. Now when I show that to people, that most people, most people, except that or get it, but really why that quote unquote environmentalists oppose it was was really a revitalization of oil and gas production, and particularly oil and gas production in the United States, environmentalists, there’s dirty, awful stuff in Nigeria, they don’t see it, they don’t raise money on it, they just ignore it. But if there’s production here in Colorado, that’s maybe displacing production, that would be in dirtier Nigeria. This, they can see this, they can demonize this they can get, you know, they can raise money by scaring people about

Robert Bryce 50:58
let’s, let’s talk about this a few more technical parts of this, because this is part of the business I think is interesting. Is it true that the more sand you get, so people don’t understand this? There’s a vertical part of the well, and then the horizontal is where the where the action is where that’s where the hydrocarbons are. And you have multiple stages of that fracking process. Is it true? Isn’t it true that the more sand that you get down into the hole, the better the production, the more productivity? Is there a ratio between and second is there a ratio between the length of the lateral and the overall productivity of the well,

Chris Wright 51:30
there is, I mean, look, a three mile well produce 50% More than a two mile well, because it’s just think of this wrongly

Robert Bryce 51:36
linked to the lateral being 15,000 feet or more.

Chris Wright 51:41
As a kid, I always thought underground you drilled and there was these lakes underground with oil and gas in it, you just sucked out of the lake. But, of course, those don’t exist, you’re flowing oil and gas through rocks, the pore space in a rock, like when a wave flows into the sand, part of it flows back out, most of it just flows through the sand, you know, at a site in a beach. So permeable rocks allow oil and gas to flow easily through them. Shale is like your kitchen counter, it’s not permeable at all. So the only way we can get those oil and gas molecules to move a few inches to get out of that rock, is to put a whole bunch of conductive pathway skinny little fracks that are held up and by sand. We can touch millions of square feet of this impermeable rock, the more rock you touch, the more oil and gas you get out. So

Robert Bryce 52:28
And what about how much what percentage? Are you recovering? If they’re, you know, you’re looking at a shale play? And you know, it depends on the thickness of the rock. But what is the recovery rate? Do you have an idea about how much you’re actually getting out with each with each lateral.

Chris Wright 52:41
So for oil, it’s only about 10%. For natural gas, it can be 50% or higher, because those are small molecules and easier to move. But for oil, it’s only about 10%. That’s coming out right now. But with new technologies, part of it will be injecting co2 or other miscible gases not to be too nerdy or too technical, there’s going to be ways ultimately to get more of it out. But US oil production is doubled. The world has become much more abundant hydrocarbons just from this small percent recovery, because the rocks that have this oil and gas in it, everyone believed you can’t get anything out of that ever. It’s like technology has changed. I always tell people, Robert, along the same point that a million years from now 90% Of all the oil and gas that was underground before humans drilled the first well will still be underground. There’s just an enormous amount of resource underground. The question is only technology can access which pieces of this gigantic reserve, we have hundreds of millions of years of stored solar energy buried underground and hydrocarbons in no practical senses, they aren’t really a finite resource.

Robert Bryce 53:50
I’m glad you said that. It’s an interesting point and it’s one that the more we find the more we find. And the more we find the more we can produce and that I was on Stossel show years ago now but it was you know we we produced X amount of hydrocarbons over a decade and yet for all of that that we produced how many million or billion cubic million barrels or billion cubic feet that at the end of that 10 years the reserves were actually grown it was though that never that all of that that we pulled out still didn’t matter. But it just a few more things on the on the issue of technology here digit frack you’re using now reciprocating engines, I think it was V 20 Rolls Royce engines that massive I’ve been on a frack spread these are you got to put a lot of horsepower onto these frack spreads to move the molecules. But you’re using these big recept engines and you’re fueling now with natural gas instead of diesel. Explain understand how the diesel works because you get a big old tech of diesel fuel and you you then feed it into all these massive engines that are fueling the pumps to pump the sand and the water down and down into the hole. Where are you getting the natural gas? How are you managing the fuel flow from the wells that you’re drilling. And where is the natural gas coming from? I guess it’s a short question.

Chris Wright 55:03
So in some cases, it’s coming from natural gas being produced from very nearby wells. Now, we still have to process that a little bit, because when natural gas comes, it has a little bit of liquid like propane, or butane or ethane. So we process it a little bit and can use that natural gas from very nearby wells to patent to process frack spreads.

Robert Bryce 55:21
So you can use or you have a fractionator on the site, then a small fractionator, that you’re you’re not a fractionator splits

Chris Wright 55:27
the liquids up, we have just a separator, which just removes the liquids from the gas, there’s still some liquid, there’s still some liquids in the gas. But we want to have as dry a gas as possible because it dry gas burns the cleanest. A lot of a lot of what we do, Robert, for these frack spreads is actually natural gas that’s already been processed. And it’s coming from a pipeline that may be 20 miles away, and therefore it’s carried, you know, in a compressed natural gas container on the back of a truck. Oh, I

Robert Bryce 55:59
see. So you’re using C you may be using gas from the pad itself, or you may be using CNG via tanker.

Chris Wright 56:06
Exactly. It’s a combination of those two. But the advantages for Digi frack for this is number one, it’s cleaner burning. And when I say cleaner, greenhouse gases is not an issue of cleanliness, cleaner means less particulate matter, less NOx. Most of that doesn’t have sulfur in it today. But it’s just less pollutants that are harmful to human health. So that’s a big thumbs up. It’s cheaper natural gas is much cheaper than diesel 234 times cheaper. So it’s much more efficient, and it will keep prices down. And it’s lower greenhouse gas emissions, which is also a plus but I would say not quite as big of a plus as the others. So the lower greenhouse gas emissions is a plus. But there’s even bigger pluses from cleaner local air and less air pollution. And cheaper and just more efficient. The world has so much natural gas, it’s just there’s much more natural gas than there is liquid fuels. So anytime you can displace liquid fuels with with methane and natural gas, you’re gonna have cleaner, cheaper, longer lived equipment.

Robert Bryce 57:09
Well, soon. We’re coming up on a lot of questions here. But I want to just pursue this other point about did you frack? Yes. So you’re also electrifying your frack spread. So you’re using this natural gas to run Recep engines Rolls Royce, I see was your vendor. And you’re using those to run generators to run electric generators to then run electric pumps, which is different than you were doing before. And on your website, you say that your tagline is faster completions, quieter fleets better service. So the quieter is interesting to me. I’m averse to noise. So you this is a different approach to fracking, to the frack hardware, where you’re electrifying it, you’re getting lowered, but you’re getting a cleaner process and less and less noise. And what is the advantage of the last I’m just pointing these out. But here’s the question What is the advantage of the electrification of the FRAC?

Chris Wright 58:05
The main advantage of electrification less noise is really liberty, sound suppression technology. Our diesel fleets are very quiet right now. So we did technology and sound suppression eight or 10 years ago, because when you’re near people, that’s the biggest complaint dirt, dust noise and truck traffic. So we’ve had technologies address all three of those electric you get precision control, instead of shifting a gear in an engine, you can you know, turn up your thermostat by point one degrees, so we can get very precision control of changing rate or changing pressure and Frack operations. So electric gives more precision control, it allows you to use some grid power, more, it still will be a minority, but as as electric grids get built in frack fields, if you can produce electricity in a giant natural gas producing power plant that’s more efficient, lower cost and cleaner than natural gas produced from a smaller plant. So we’re

Robert Bryce 59:05
electricity electricity produced from us from a smaller plant.

Chris Wright 59:07
Yes, sorry. Yes, electricity. So any case so by having electric fleets we’re going to be able to use grid power when it’s available may only be partially but we’ll use the grid power weekend, we’ll get precision control. And our electric fleets going forward will be a combination of natural gas burped and these reciprocating engines turned into electricity and then driving electric motors. Some of it will actually be another technology. Robert, we haven’t announced yet but we’re going to in a week or two I think before this podcast comes out. We’re going to announce a different way to achieve Digi or a supplement to Digi frag which is going to be to burn a very simple also gas reciprocating engine, but a gas reciprocating engine straight into mechanical power driving a pump. So did you Frank will be a combination of the two. Probably a lot of it will be direct drive If gas combustion to mechanical power, and then a piece of that whole system will also be fully electrified for precision control, and the ability to take whatever power we can get off the grid. And in fact, we’re going to be with both of these systems, the even the direct drive one, it’s going to have an electric motor on it. And when we produce extra power that we’re not using, mechanically, we’re going to either store it in a battery or deliver it electrically to other operations on the location, and ultimately, potentially into the electrical grid. So Liberty energy is getting more in depth not to frack is the core business. But we’re going to play a larger role in managing power gas into electricity, electricity into powering devices, and peak shaving, you know, a lot of a lot of power consumption gets hurt or becomes inefficient when you need brief periods of very high power. So by electrifying and having some energy storage in batteries and other ways we’re going to reduce peaks. So we’re basically trying to drive things to be cheap, cheaper, cleaner, safer,

Robert Bryce 1:01:07
smaller, faster, lighter, denser, cheaper. I’m all about that. Yes, it sounds like a book I should write. How many FRAC pleached Do

Unknown Speaker 1:01:16
you have? Kind of in the mid 40s.

Robert Bryce 1:01:19
You have 48 frack fleet. So these are the assemblages of how many trucks would that be in a frack leader? How many?

Chris Wright 1:01:26
Each one, each one of those fleets is sort of roughly 60,000 horsepower. So it’s roughly the power of a 747 jet engine. So we have today running a little less than 5747 jet engines of power, that’s a lot of power, that are again, helping drive the US and Canadian shale revolution.

Robert Bryce 1:01:49
And are you buy? Are you building more now? Are you expanding the fleet? Are you contract? Are you staying level? What’s your plan?

Chris Wright 1:01:55
We’re not, we’re not going to grow our total deployed capacity. If we do it only be modestly. But we’re building these newer higher Tech’s that will that will slowly replace our existing more diesel powered engines. So we’ve got straight diesel, we’ve got diesel that can burn together with natural gas, then the latest generation of diesel called tier four engines are incredibly clean burning diesel engines. And some of those we also have that can burn mostly natural gas, and the very clean burning diesel engine. And then the latest generation is this 100% natural gas consumption. So we’re sort of slowly going to migrate our fleet from what it started at, in our firstly, all diesel to all natural gas, but that migration to all natural gas, you know, that’s, that’s six to 10 years.

Robert Bryce 1:02:41
Gotcha. So let’s talk about your labor force. You talked about you wanting to retain people what, what is the if you’re your workers on fresh bread, you obviously have different levels of competence in different level pay levels, an average worker on a frack spread, how much will they make that 100 grand? So on an hourly basis, what does that work out to? What 50 6070 $80 An hour something like that?

Chris Wright 1:03:07
No, I mean, to get to 100 grand with a 40 hour work week, that’s $50 an hour. Okay. But ours are different. They work long stretches. So there’s there’s a lot of overtime baked into that. We have bonuses for performance, we have matching for 401 K, so the hourly thing, it’s all just depends how you count it. I would say compensation is about $100,000 a year and incredibly generous health plan 6% matching for 401k. What are the differences in our companies working in the field is tough. And so people often do it for a few years, and then they take time off, they go to another job. We want it to be a career. So instead of working two weeks on one week off our fear, our field crews work two weeks on two weeks off. So even if they’re from Alabama, and they’re working in West Texas, they’re away working their tails off for 14 days. But then and then they get to travel home. So maybe you lose a day and travel but then they’re home for 13 days with their wife and their kids and their family. Some of these folks, of course, are working when they’re home too. They’re just hard driving people. But you don’t have to you’ve got 13 days off every month to spend with your family to do other stuff. So what we’ve tried to turn it into his career and with this 401 K matching and we automatically sign everyone up to do that. People are building up a strong retirement savings. They’re learning skills and moving their way up. Liberty to us is is is sort of an answer to the the rural Blues of the last few decades. Everyone is urbanized rural areas vent declining population declining incomes, growing drug problems. This is a most of the people who work at Liberty in the oil field are from rural areas, but it’s sort of it’s high income jobs into local rural areas. And we’re getting all Some workers that are hard driving people that haven’t had a lot of great local job opportunities, but if they’re willing to travel and be away for two weeks, they have a high paying professional job.

Robert Bryce 1:05:10
So I’ve heard it, you know, I travel a fair amount, and I do a lot of public speaking different groups. And the thing that I hear from small business owners, large business owners as well is shortage of labor. What who are the people that are hardest to find? And or let me ask this, how many positions do you have open in your flat in your frack business? I’m assuming it’s easier to find people that want to work in the office in Denver. But how many people? Could you? Are you short, if you can fill them those positions? Now? How many positions are you short?

Chris Wright 1:05:38
So Robert, today, we’re probably short one or 200 people. So if you’re listening reach out to Liberty FRAC or Liberty But but six months ago, or 12 months ago, we were probably short, a few 100 people. So labor market is still tight. It’s still tough, but it’s not as crazy hard as it was. And it was crazy hard. Because a few million people left the labor force and a year or two after COVID are erupted. We’re still out of the labor force. Those people are coming back into the labor force today.

Robert Bryce 1:06:10
And it isn’t hard to get them to. I mean, this is the other thing that I’ve heard is that, you know, they may be willing and they may be hard workers but they can’t pass a drug test is that I mean, you’re in Colorado, where we it is legal. Now is that is that how hard of a problem is that?

Chris Wright 1:06:22
It? Well, I mean, certainly a good number of people that originally applied don’t pass a drug test that is for sure. But I mean, we’re very open. That’s that’s a requirement for work. We work in a dangerous situation we need people aware and, and on their game at all times. But But I think most people know what they’re, most of the people that come in to liberty, have friends that already work at Liberty. You know, we hired a guy who was a plumber outside of Boise, Idaho, and it was, as he would say, life changing for him. He said, I don’t think my kids had a chance to go to college. I saw him a few years ago, a few weeks ago in North Dakota, he said, they’re all going to college. Now I’m confident that you’ve changed my life. But that guy now we got five of his friends that live near him in Boise, Idaho, they all work from Liberty. So a lot of the people who come to us come from word of mouth, from people that already work here. So I would bet our batting average for failing drug tests, it happens, but it’s actually pretty high. Most people are passing these drug tests. They know what they’re going, they’re signing up for when they come to work at Liberty. You know, we’re hiring people that used to be carpenters used to work on roads used to work, manufacturing mechanics, you say what’s the hardest to find right now, mechanics and electricians, the trades in this country. We are not educating enough people or training enough people know how to shorten skills

Robert Bryce 1:07:42
that know how to make the world go round, that know that know how to turn a wrench.

Chris Wright 1:07:46
Exactly. And that’s just that’s such an awesomely important skill. I’m so impressed by how good these people are. I’m terrible at that. And if we were counting on me to keep the frack fleets running, they would not be running. But we’ve got a number of tremendous mechanics and E texts, but but always looking for more. And through training through the way we treat them through the pay in the compensation lifestyle. When people come to Liberty, they tend to stay. But um, as we’re growing, of course, we’re always looking to find great passionate humans.

Robert Bryce 1:08:19
So we’ve been talking more than an hour and my guest again is Chris Wright. You can find him at Liberty and his bettering human lives report. Last three questions. Chris, what’s the hardest part of your job?

Chris Wright 1:08:32
Oh, hardest part. Like humans, you know, the most. The most enjoyable part of my job is fantastic people doing great work. But when people aren’t getting along, when they’re when there’s bad chemistry, you know, when you’ve got to fix human problems. That’s the most stressful part of my job.

Robert Bryce 1:08:50
My brother Wally has a long career in business in the insurance sector. And he’s said Why don’t know why to be complicated only involves people and money. Last two questions, Christian. You know, I asked these of all my guests, what are you reading? What’s on your bookshelf? What do you top of your book stack?

Chris Wright 1:09:05
Wow. You know, look, I read a lot. I’ve been reading recently, a few great books about China, most of them a few years old, but just trying to understand how the Chinese think and where things might evolve. And in fact, it’s actually made me feel better. I think the odds of a Taiwan invasion in the near term are actually quite low. So I read about that I read a lot about energy I read a lot about about history. And as I mentioned earlier, God I’d love to mention that two books three books that John Constable turned me on to by a guy named Anthony God. But

Robert Bryce 1:09:43
I’d find it too he mentioned them on my podcast it’s in the it’s in the transcript of that podcast that I did with constable but yeah, Anthony something or Anthony Morris? No. Yeah, well, anyway,

Chris Wright 1:09:53
versus the guy. Yeah, right. Right, right. Yeah. Fossil fuels. Alright, it’s embarrassing. I can’t remember the guys name. And, and I’ve sort of drifted back into reading great fiction as well. You know, I read recently a little Welsh, Shakespeare because he’s just so impactful and so impressive. And not to read Barnaby Rudge from Charles Dickens. In fact, I heard about him. I think it was on your podcast, and it was Jesse. Awesome. Mel that recommended. Yeah. But any case that you know, there’s so much great stuff out there about about this about the state of the world about technology, about energy in fiction, which is what keeps me optimistic, I get it, we get beat up all the time in the energy world. I’m an optimist. I’m loving life. And I think things are things are gonna are very much gonna move for the positive in the next decade as they had the last couple decades. We’ve just

Robert Bryce 1:10:46
jumped, you’ve jumped the gun here. Right on the last question, what gives you hope?

Chris Wright 1:10:50
What gives me hope is you know, I look at it right now. Look, I was born in the second half of the 20th century, in an intact loving family with above average, quantitative skills, crazy lucky on all front, I’ve been able to have a dreamy, empowered entrepreneurial life. You know, my wife and I get we just lost the school in Colorado, we held a school there in California where we used to live, we have hundreds of kids on scholarships, we’ve been able to do great things. Because we were lucky in the conditions we grew up and we were born. So my goal is to bring help spread that luck, that freedom and opportunity to everyone else. And that’s why our company is named liberty. But the the two things are getting barriers out of way for people to have opportunity. We’re going to have a great film here and in a few weeks in Colorado about a gal who trained to become a nurse in Illinois and then couldn’t work as a nurse because she had a teenage felony conviction. That’s just a barrier to someone realizing their dreams. She pushed through a licensure reform law in Illinois, God bless her changing the game. We’re gonna do the same thing here in Colorado. I’m so optimistic positive change can happen. The world is not some climate change. Today, we’re driving the price of energy needlessly up, were destabilizing our electricity grid needlessly. These are huge problems. But ultimately, they will be reversed when when political aspirations collapse combined with collide with physics, physics wins every time and will again here but you and I, Robert and so many others have to continue to push that effort to bring energy sobriety to try to stop more of this damage before it happens. But I’m optimistic because I believe we will win. We will reverse this damage. But today, yes, there’s a lot of stuff going the wrong direction. But we’re going to stop it and I believe we will.

Robert Bryce 1:12:43
Energy realism is humanism. Exactly.

Unknown Speaker 1:12:46
That’s perfect dandy. Well, good. Well, my guest

Robert Bryce 1:12:49
has been Chris Wright. He is the CEO and chairman of liberty energy, which is a Denver based company that provides hydraulic fracturing services and other services to different variety of companies. Chris, thanks a million for coming back on the power hungry podcast. Always fun to talk to you.

Chris Wright 1:13:05
Thanks, Robert. Love your podcast. Appreciate all you do. Take care. And thanks

Robert Bryce 1:13:08
to all you in podcast land, tune in for the next episode of the power hungry podcast. And while you’re at it, subscribe to me on substack Robert I’m just launching a new presence there. So until next time, see ya

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