Dry Side Dispatch • October 16 • Robert Crain

[00:00:01] Speaker A: Hello. [00:00:01] Speaker B: Welcome back to the dry side, Dispatch. It's Tillery and Dusty and Andy here. All together again today. [00:00:08] Speaker A: The band's all back together. [00:00:09] Speaker B: The band's all back together. Andy was fishing in the Gulf last week, so he had to. [00:00:14] Speaker C: Unfortunately, I left plenty of fish down there for everybody else I could legally take, so. [00:00:21] Speaker B: And we have with us today, Robert Crane. Robert, thanks for being here. [00:00:24] Speaker D: Thank you. [00:00:25] Speaker C: Appreciate you coming. [00:00:26] Speaker D: Yes, sir, thank you. [00:00:27] Speaker B: Texas Pacific Water. [00:00:30] Speaker D: Yes, yes, ma'. Am. Texas Pacific Water, which subsidiary of Texas Pacific Land, which is actually not contiguous, but the largest landowner state of Texas. [00:00:38] Speaker B: Yep. [00:00:39] Speaker D: We got right out a million acres. Wow. [00:00:41] Speaker B: A million acres. And it's from sovereignty, isn't it? [00:00:44] Speaker D: So really neat backstory. Texas Pick Railroad, which was supposed to go from Marshall to Marshall, Texas to San Diego, it's called late 1870s, the state was giving out a section of land for every one mile of track that was laid. So they ended up with 3.4 million acres of land and minerals. Railroad goes bankrupt in 1888. And all of the land was put into Texas Pacific Land Trust. And the joke is it was the only business meant to go out of business. You were supposed to sell off the land, pay the shareholders, the railroad back and go out of business. That continued on. What a lot of people don't realize, a lot of the legacy West Texas ranches. So the way it was done, it was checkerboarded acreage. So Texas, you know, didn't want land barren. So it was checkerboard acreage. So when they gave, when they had the mandate to sell off the land in the late 1800s, the ranching community that a lot of Midwest guys that had come down, you got to think of the big families, the Scarboroughs, the Beals, the Faskins, they started buying all the checkerboard land. So that's what made a lot of big legacy ranches of West Texas stayed that way. By the 1920s, they were down to about a million acres, which is where we're at today. Continuing on that way, obviously oil was discovered in the early 1920s and that changed the direction somewhat. They still were a self depreciating trust, but it changed a little bit. They were still selling off land. The minerals were spun off in 1954. One thing a lot of people don't realize is all of Chevron's minerals. So we spun it off and I say we. I wasn't even born 1954 or 56 was spun off into a company called TXL. Texco acquired TXL. Chevron acquired Texaco, So all of Chevron's Permian Basin minerals are Texas Pacific Minerals of which we retained a non participating royalty interest. [00:02:33] Speaker B: Okay. [00:02:34] Speaker D: So it continued on that way until 2017. A new CEO came in in 2017. He was a ripe 31 years old and he wanted to change the direction of the company and make it more active management. So it was TPLT then Texas Pacific Land Trust and he ran three different divisions, the mineral side, the land side and the water side. But we turned it more from passive management and self depreciating trust into active management. I started Texas Pacific Water in 17 and we are the. Well, there's only 10. It's been pretty successful. There's only two companies that have outperformed us on the stock exchange over the last 10 years. Those are small companies called Nvidia and Tesla. [00:03:18] Speaker B: What? [00:03:19] Speaker D: And so we have taken it to today we sit at about a $28 billion market cap and have. And the water, the water has grown from me and a couple buddies in a hotel room at the Doubletree on Wall street and to what is the largest water water company in the Permian Basin. [00:03:39] Speaker B: Okay, I'm just speechless. I'm sitting here. I did not know this. [00:03:42] Speaker D: It's been a wild ride and I know we're on radio, but I had a full head of hair when we started. Well, we're actually, I don't now. I do not have your full head of hair now. And so yeah, we're our Texas Pacific Water. We' our main business is frack water. So deep brackish water and that we, you know, when we really started out the company before produced water, the volumes of produced water are what they were. We started building brackish water systems that has pivoted a lot to produced water. Now because of the amount of produced water that's in. So we focus on brackish water produced water recycling to where we take, you know, a lot of water. Say we take Exxon's water and Chevron's water, we treat it, blend it and then we might sell it to a bpx. And then these last couple of years focused heavy on produced water desal. And so that has been. We can get into the details of why we did it, but it was mainly solved the produced water problem. So we started that about five years ago, started another subsidiary company called Transmissive Water Services, patented some technologies and actually built the first ever produced water diesel plant in Orla, Texas. [00:04:53] Speaker B: Yeah. [00:04:53] Speaker C: Is that the one that we've seen pictures of, we've talked about before or not? [00:04:56] Speaker B: I Think. [00:04:57] Speaker C: Well, I think I went to a conference at Texas Tech on produce water. [00:04:59] Speaker D: Okay. [00:05:00] Speaker C: And there was a guy there that was talking about. [00:05:03] Speaker B: So there's, there's a few, like, pilots. Yeah, there's a few pilots there. So I'm not sure which one. Yeah, you've seen, but it was pretty small. Amazing. [00:05:12] Speaker D: It's a plant and I mean it. [00:05:15] Speaker B: But. But how you got from zero to where you are is a pretty incredible story. [00:05:21] Speaker D: Thank you. [00:05:22] Speaker B: I mean, just the technology that you guys are using is pretty interesting. [00:05:30] Speaker D: Yeah. So when we, you know, if you think about produced water, you know, the hardest thing to move, remove from water is salt. And when you think about an ro, an RO works great when you're, let's say brackish water. And we'll talk in tds, Total Dissolved Solids. You know, if you're talking brackish water, that's a couple thousand parts. Works great. RO works great. Until you get up to about 30,000 parts. Think about the ocean. Think about the desal plants on the west coast, in the Middle east, the one they're talking about in Corpus. You can use those using reverse osmosis. And reverse osmosis, it works. You have to think it's a membrane with pressure. You can only put so much pressure on that membrane and so you can only get so much salt excluded from that water before you'll bust the membrane. You have to go to a thermal technology. So produced water is about three to five times saltier than the ocean. So this water that we're dealing out without here can be okay. It's, you know, call it 100 to 150,000 parts. So it is extremely what we call hypersaline water. So you have to pivot to a thermal technology. If you think most thermal technologies, distillation, how they make distilled water, they boil it, they capture the vapor. [00:06:44] Speaker A: Or my favorite use of distillation, whiskey production. [00:06:46] Speaker D: Whiskey. So we started trialing technologies. I'll back up a little bit. You think about 20, 21, 2021, kind of that post Covid oil and gas boom. We started to see you were going to have problems managing this water. You weren't going to have enough pore space for injection before you realized the final drop of oil that could come out of the Permian basin. And so we were kind of the first ones to say desal is produced water. Desal is going to be a thing. People thought we were crazy. And it was like telling you it's not a complicated calculation. If you look at pore space, you can do what we call tank size analysis. How much water can you put into an injection zone before that injection zone fills up? So we started small, and actually Adrian Lopez, who's my research development director, we started trialing different technologies. Chloride eating bacteria. And we were on the phone with an old professor, and he said, hey, have you ever thought about freezing it? I was like, not, no. He's like, well, think about it. Think about how you remember the old beer butt ice that they used to make? That was a freeze distillation. They make some vodkas that way. So when I tell you we started so simple, I told Adrienne, I said, go to Lowe's and go buy some of those countertop ice makers and put some clean produced water in those countertop ice makers and see what happens. And she called me, I was traveling, and she said, rob, it works. And she's like, my ice cubes are coming out fresh compared to the water I put in. I was like, okay, we got to keep chasing this. And so we kept chasing it and, like. And we. We didn't know what the hell we were doing. We literally at first thought, how do we freeze the whole frac pit? And, like, that's not gonna work. So we actually pivoted to the food and beverage industry. If you think about poultry plants and salmon plants, they have to bring those birds and that fish down to temperatures to kill all the bacteria. So we went to a company in North Carolina. I won't name them because they're still under a non disclosure with us. And we gave them the concept. And they're like, you're crazy. Like, well, let's try it. You know, take some of your technologies and see if it works. And we paid them some money for some development for some R and D. They call us a couple months later, and, like, it works like, okay, we got. We got to perfect this. And so essentially what we do is, if you think about how ice is made, when ice is made, ice wants to just be the ice crystalline structure. It wants to be just hydrogen and oxygen in there. And so if you do it right, this is what we've perfected over the last couple years of moving this water through pipes. As you put compressed ammonia as your refrigerant around the pipes, that ice crystal forms. And as that ice crystal forms, it wants to push out all the impurities that are night hydrogen and oxygen out of there. And so what we've perfected through flow temperature, you know, how we. How we make that ice is we take the water, we run it through that ice forms and that ice is clean, is clean water. What happens is the rest of those analytes stay concentrated in that brine that doesn't freeze. Then we melt that ice ro it and then you have fresh water. [00:09:55] Speaker B: Oh my gosh. [00:09:56] Speaker D: And so that's the plant Norla does 10,000 barrels a day. And so we've patented the technology. You can call it a couple different things. Fractional freeze, freeze distillation. [00:10:06] Speaker B: Right. [00:10:06] Speaker D: And so this will be the first of its kind. We've got 20 acres of native grass restoration out there. And then very, very soon we will have a TCQ permit to discharge that water into the Pecos River. [00:10:18] Speaker B: You guys have been working on that permit for a while. [00:10:21] Speaker D: Three years. [00:10:22] Speaker B: Yeah. People wonder why we haven't been using the water yet. [00:10:25] Speaker A: Like listen, when it comes to getting stuff done through the government, three years is not a long time. That's. [00:10:32] Speaker D: And we appreciate, you know, we appreciate the focus that the TCQ put on this. You know, this is not typical water. This is hard, hard water to treat. It's actually a six step process. And how you do it, the TCEQ has taken the last three years to make sure we're doing it right. Can you, you know, what do you need to be testing for on the front end? What do you need to be testing for on the back end? You know, I tell everybody is this is process design and then it's process control. Process design is what we've been proven to the regulators for these last three years that it can be done. And then they want to see process control. Okay, what are you gonna do day in, day out to make sure you don't mess up? And that's what we've perfected. [00:11:15] Speaker A: When you, when you freeze it and then run it through, what is it? What's the ph of the water when it comes out? [00:11:21] Speaker D: Ph is probably, don't get, don't quote me on this. PH is probably gonna be neutral to slightly less than neutral. It can be rather soft because you have to think what makes ph is, you know, your, your alkalinities. So you've stripped most of that out. So it's probably gonna be a slightly less than neutral. What we do, what the thermal does. So if you take, if you think you have water coming in it, let's go be simple. So it's a hundred thousand parts coming in. All we want the technology to do is to get it down to RO inlet quality feed, which is about 20,000 parts. At 20,000 parts you can be in the money on RO. [00:11:54] Speaker A: Yeah. [00:11:54] Speaker D: And the reason we like RO is it's a tried and true trusted technology. You use that as your kind of your polishing. So you take 100,000 parts, water, the freeze gets it down to about 20. The RO gets it down to 250 parts per million. So it is the cleanest tap water you can imagine. Now then we might have to run it through depending on the applications. UV light, granular, activated carbon disinfection techniques that you. Depending on the use of water, where [00:12:24] Speaker B: it's going to go next, where it's [00:12:25] Speaker D: going to go, this water is going to be. So the plant is a completely closed loop system. So all of the cooling, all the fire suppression water is using our clean water that comes out for that. You probably put some disinfectant in it for plant use. If it's going into the river, believe it or not, we add salt back into it. [00:12:44] Speaker C: Yeah. [00:12:45] Speaker D: Because they called Salt Creek Salt Creek for a reason. [00:12:48] Speaker B: Yeah. [00:12:48] Speaker A: And if you change the ph, what you're putting in too much, you can [00:12:51] Speaker D: cause you're going to change, you're going to change organism life. So there are some organisms out there like the Pecos pupfish. [00:12:57] Speaker B: Yes. [00:12:58] Speaker D: They've adapted to a high salinity environment. So what we'll be doing is we'll be reinjecting food grade calcium chloride back into the water before it goes into [00:13:07] Speaker A: the river to pretty much match the content of the water. [00:13:10] Speaker D: No, exactly. It won't match because you have to think the Pecos does have. And I'm sure we'll discuss the decreased flows and the Pecos. The Pecos is seeing a higher salinity because of the reduction in flows in there. The Pecos shouldn't be 20,000, 16,000 parts. If you look at what native Pecos should be, it's probably in that thousand to five thousand range. You're gonna get some wash off. And so we're gonna make the Pecos what it used to be. We joke. We're make the Pecos great again. [00:13:42] Speaker B: So were you at the, at the Friends of the Pecos at their meeting? They had Ira Yates. [00:13:51] Speaker D: I went to Iran in Ira Ann. That was what, two weeks ago? [00:13:54] Speaker B: It was. [00:13:55] Speaker D: And then the Waters West Texas event last week where I met you. I did not make it to. They did another one with Quail Ranch last Friday. I did not make it. [00:14:05] Speaker B: So I didn't, I wasn't at the, at the one in Iran. But it sounds like it went really well. It was a public meeting. [00:14:11] Speaker D: Yes, ma'. [00:14:11] Speaker B: Am. And they just had really Good dialogue. They did. [00:14:16] Speaker D: You know, those are the type of community meetings we need. [00:14:19] Speaker B: Yes. [00:14:20] Speaker D: You know, we want to hear. You know, I will say there's. There's two issues and I think the issues kind of get confused. There's the produced water issue and the produced water issues and zombie wells and what we're getting from, you know, just the blowouts. You know, we started this to solve that problem and we have to be honest about that. You know, we started this to solve an upstream water problem. You know, our CEO and our board has been behind us to say, look, there's a better use of this water. [00:14:46] Speaker B: Yeah. [00:14:47] Speaker D: Now the other issue is the health of the Pecos. You know, that is, that is not something that oil and gas had any part of. That had to do with the adjudication of all the irrigation districts and their rights to Red Bluff and the decrease of releases from Red Bluff and just the health of the Pecos. Now when we look at both those problems and how one can solve the other is pretty amazing. [00:15:09] Speaker B: It is, yeah, it really is. Yeah. And so people that don't know about what's happening at Red Bluff, this is where they're selling off? [00:15:16] Speaker D: Yes, ma'. [00:15:16] Speaker B: Am. Yeah. Water's being sold off there to. Is it San Antonio fresh water? Yeah, it's for municipality use, isn't it? [00:15:25] Speaker D: Well, they sell a lot to oil and gas. [00:15:26] Speaker B: Oh, is that where it's going? [00:15:29] Speaker D: Red Bluff does sell water for oil and gas. Fracking. Yeah, they are releasing right now because I think there's some work being done on the dam. But you know, what's happened over the Pecos over the last 50 years, you know, you see the decline of agriculture, you know, down in that Imperial and Palisades area. You know, I think it's something that these, the introduction of this new water into the system is going to help fix. You know, if you look at the amount of water that's in the permit queue, it's pretty mind boggling. There's 11, what is it, 1.1 million barrels a day is waiting for approval in the TCQ right now. That will all be going into the Pecos River. [00:16:11] Speaker B: So that's the plan right now. [00:16:14] Speaker D: 42. [00:16:14] Speaker A: 42 gallons. [00:16:15] Speaker D: 42 gallons. Roughly 45 million gallons a day. A day is waiting in the permit queue of the TCQ right now. [00:16:23] Speaker B: So the last I heard, Laura Clapper, she's great about water numbers and she's fabulous and she said it was about a quarter of what agriculture uses on, like where we are in the southern high plains. [00:16:37] Speaker D: I Will trust Laura's numbers. [00:16:39] Speaker B: Yeah, we use a lot of water here. [00:16:40] Speaker D: We use a lot of water. And when we look at, you know, [00:16:43] Speaker A: 31 acre feet a day. A day, roughly. [00:16:48] Speaker D: And you know that's, you got to think of the Delaware Basin and start to parcel off the Delaware Basin. Because the Delaware Basin is a mass expanse. So if you think that kind of, you know, the corner of Texas and New Mexico is just about that eastern boundary, you know, all the way over to south or west of the Reeves Culberson line, probably about 40 miles. You know, if you look at your east west expanse of the Delaware Basin, that's Probably, that's over 100 miles, probably 100, 150 miles. What we've got to start to look at is what is the right use of that water and what fits economically depending on where you are in the basin. You know, if you look at where we're doing, all the discharge permits right now are on that Reeves Culberson area. Everything's going to be discharged Red Bluff or south of Red Bluff into the Pecos River. When we start looking at the more eastern edges of the basin, what is going to be the, the most beneficial use of that water on the eastern edge of the basin? That's where we say ag. You know, it's really as the crow flies. If you look, you know where we're putting disposal zones now comparatively to where the agriculture activity is. [00:17:54] Speaker B: Oh, there's one area. Yes. [00:17:56] Speaker D: We're not that far. [00:17:56] Speaker B: No. And if you look, I mean, I know there's one. I don't know if it's. It is, it's, it's not far from your farm. There's one that's not too far from their front. [00:18:05] Speaker C: Really. [00:18:06] Speaker B: We haven't. There's a couple of wells in there. Andy's, Andy's son is a petroleum engineer and he worked on a well that was. My grandparents have some interest in. Had some interest in. And it's not far from there. [00:18:19] Speaker C: Yeah. [00:18:20] Speaker B: So that's, I mean, because I've looked at those to see where those injection sites are, to see how far it would. [00:18:25] Speaker D: We're less than 50 miles. [00:18:26] Speaker B: Yeah. [00:18:27] Speaker D: In some areas. And you have to think to the Delaware Basin, you're starting to see step outs. And when I say step outs, it's, you know, if you look at a geologic map of where the basin starts and you know, think about kind of artesia to the north, you know, you start to dip into the basin, you know that it goes down into Pecos and when you start to Climb up what we call the platform or the shelf is about at the state line where you start to climb. You're starting to see step outs to the north and step outs to the west where you know the, the techniques of, you know, the, the horizontal drilling. You know, there are some, some zones that are being targeted now that are on the step outs of the basin. And so what does that do? It gets you closer. And if you look almost northern Lee county, just about the Hobbs, you're seeing activity and then you're seeing a lot of disposal zones that way. So when we look on the eastern extent of the basin, the one thing we don't have is a lot of rivers to discharge that water into. But you got a lot of ag. And you know, I know Senator Perry, one of his ultimate goals is to see that water. To see, basically see a northeast pipe built that would take that water up here to offset some of the losses that the AG is experiencing. The Ogallala. [00:19:39] Speaker B: Yeah, yeah. [00:19:40] Speaker C: Once you freeze it, like I know there's some stuff that doesn't go into the ice. Like what percentage of waste is left over from after the freezing process and what do you do? How do you dispose of that? [00:19:50] Speaker D: Would that go back, that goes back into a disposal well. [00:19:52] Speaker C: So basically you're what percent of it are you getting out by freezing it? So that may be proprietary. [00:19:59] Speaker D: No, it's not at all. What we tell people all the time is all depending on incoming salinity. [00:20:03] Speaker C: Yeah. [00:20:03] Speaker D: And so no matter what, we have a, we have, we, we came up with this moniker I did a couple years ago and some people don't like it, but I call it 75 cubed. [00:20:12] Speaker C: Yeah. [00:20:12] Speaker D: And 75 cubed is I want to take seven, I want a 75 pass through rate. So if I take. And the easiest way to think about is 100,000 barrels a day coming in. I would love to get 75,000 barrels a day of clean water. [00:20:24] Speaker C: Right. [00:20:25] Speaker D: The NET that next 75 is I want 75% of the analytes compounded in that remaining 25% brine stream and want to do it for less than 75 cents a barrel. [00:20:34] Speaker C: Yeah. [00:20:34] Speaker D: Now that is a stretch goal of something we dream about every day. But what we tell people on the amount you can recover is you can't defy chemistry and physics. And it is all going to depend on what your incoming salinity is. [00:20:45] Speaker B: Is. [00:20:46] Speaker D: So think about, you know when people say 10 pound, what 10 pound brine is. 10 pound brine is water that has been completely saturated to the water can hold no more salt in that water. And you know, true 10 pound depending on what the salt is. You know, sodium chloride versus calcium chloride really at about 240 to 250,000 parts. That's when it becomes very hard to saturate any more. [00:21:09] Speaker C: Right. [00:21:09] Speaker D: Compound. You can't compound and saturate. [00:21:11] Speaker C: Kind of like putting more tea in your sugar than it'll sugar in your tea. [00:21:15] Speaker D: You're drinking sugar. And so let's say at 100,000 parts we can compound up to about 250. Well that gets us up in that percent range. Now say if you have a zone that's coming in at 150,000 parts, you're not going to get that 50 to [00:21:30] Speaker C: 60% recovery rate but you're still reducing the amount that has to go back in the pore space. [00:21:36] Speaker D: And that's what we've always said, beneficial reuse or produced water desal will never get rid of disposal. It will decrease it. [00:21:43] Speaker B: Right? [00:21:43] Speaker A: Yeah. [00:21:44] Speaker D: And that is the ultimate goal. Take a hundred thousand barrel a day system and turn it into a 50,000 barrel a day. [00:21:49] Speaker C: Now are you getting, are you getting the produce water after it's been through a plant that's taking any hydrocarbons that are left over from the. When it comes, you know, because a lot salt water has hydrocarbons in it that they're taken out I guess before they dispose of it. [00:22:02] Speaker D: Well, so the operator. The way it works is if you think if you fly over and you see a production facility and a production facility has what you call a gun barrel or an oil water separator, the operator is doing the bulk of the oil removal. You know, it's a three phase separator. Water, oil and gas. There's some residual still left in there. And we deal with that even when we're dealing with water just for refrac. [00:22:25] Speaker C: Sure. [00:22:25] Speaker D: So we do have a secondary or removal step on our site. So we run it through another gun barrel. [00:22:30] Speaker C: Yeah. [00:22:31] Speaker D: And then we, you know the first step is a pre treatment process. And so if you think about when people say produced water recycle and it's a bit, you know, you have to say that has been a huge win for the industry. I think Exxon put out their 2025 report. I think it was 92% of all their wells were fracked with recycled produced water. [00:22:50] Speaker B: Wow. [00:22:51] Speaker D: It's just. There's too much, you can't. And it's a compounding problem. You know for every. There was a. There was an old petroleum engineer that made the joke, he said, you can't frack your way out of this problem because at a frac spread. Add a frac spread. Okay. It took a little bit more of the supply of produced water coming in, but what did it do? It made four times as much. [00:23:10] Speaker B: Right. [00:23:11] Speaker D: Because what makes the Permian is that water to oil ratio. [00:23:14] Speaker C: Right. [00:23:15] Speaker D: You got to think every basin is different in what we call the wr. The water or ratio. And that is essentially how much water do you get up with every barrel of oil you pull up in the Eagle Ford? Extremely low. [00:23:27] Speaker A: Right. [00:23:27] Speaker D: Your Eagle Ford is you get less than a half a barrel of water for every one barrel of oil. The Permian. The joke is these are water wells that make a little bit of oil. [00:23:34] Speaker B: Yes. [00:23:35] Speaker D: You know, it's a 4 to 5 to 1 water to oil ratio. [00:23:39] Speaker C: Terry County's 32 to 1. [00:23:41] Speaker D: Is it really? [00:23:42] Speaker C: Yeah, they have an injection site, right? Well, she's talking about like. Yeah, I'd say at least. [00:23:47] Speaker A: At least. [00:23:48] Speaker C: That's why there's no. [00:23:49] Speaker D: That's why. [00:23:50] Speaker C: I mean, there's nothing there. I mean, there's oil down there, but what do you do with all of it? There's so much water that comes up with it. You have to have injection sites physically at the tank batteries. You can't haul it all fast enough. [00:24:02] Speaker A: But if you had something like this, you could have a pivot that you. [00:24:06] Speaker C: Well, yeah, you could do that. Or I mean. And who knows what's going to happen, you know, with the, the completion techniques too. Maybe there's some way they can mitigate the amount of water. [00:24:16] Speaker B: I looked at that like, because there's not far from there is the, the park that is in Terry county that used to have water running through, had a little creek that ran through it. And I looked at that, wondered if you could put, you know, you're close enough, could you put it back in that and you know, for just some recreational. [00:24:36] Speaker C: Yeah, well, right now they're paying. I can't remember. I'm trying to think. I think it cost them like 50, 000 bucks a month because it's like a 600 horsepower vertical hollow shaft engine that's injecting all that, that water back into the soil. And so, I mean, obviously there's some synergy there somehow where whatever it cost to all these, the technology process has to be. Right. Correct. [00:24:58] Speaker D: Well, it's also economics on the amount of oil you're getting. So if you look at a, a Delaware basin, well, it's going to IP at 12 to 1800 barrels of oil. So it's making a lot of oil. Yeah, it's just making a lot of water at the same time. So it's, you know, the, the reason it's beneficial to do it is because the amount of oil that's coming up now, water is becoming. Water is now the most expensive operating expense expense for an operator right now in the Permian Basin. Dealing with the water cost you more than anything. So what we tell everybody is, you know, we have a, we have a kind of saying internally. It's called keep the bit turning. And I tell my folks all the time, I know you're in the water world every day, but you don't work for a water company, you work for an oil and gas water company. And our job is to always keep that bit turning. And so by keeping that bit turning, what do you have to do? You have to, you have to have a technology and a system that fits in the economics of that upstream operators program. You know, you can't go to an Exxon and say, okay, I can take your 10,000 barrels a day of water, but I'm gonna charge you $9 a barrel to do it, Right? Nope, we're going to go for Mexico. [00:26:07] Speaker B: Now it all comes down to economics. [00:26:08] Speaker D: It's economic. And so, you know. Yeah, and what I tell everybody too is think about it from an operator's perspective. Don't think about it in the price per barrel to treat that barrel of water. Think about it in the price per barrel to treat that barrel of water multiplied by the number of barrels to do it related to that barrel of oil. So if you're $2 a barrel and they're at a 4 to 1, that's an $8 per barrel of oil. And so think about that. When you think about the operators, when they talk about break even costs. [00:26:38] Speaker B: Yes, right. [00:26:39] Speaker D: And a break even cost, you know, they'll put out their numbers and people measure it different ways, but you know, call it 30 to $35 is what an operator says. That's the break even cost. That's what they've got in that barrel of oil. Think about how much water is a factor in that cost at, you know, right now let's call the average price to handle a barrel of oil at seven a barrel of water at 75 cents a barrel. Multiply that times four, you know, that's $3. That is just in $3 of that $35 barrel break even is just in handling the water. [00:27:15] Speaker B: Yeah. My goodness. It's crazy to me. Just, I think you know, I think when I first started getting interested in produce orders, probably like 20, 21, maybe something like that. And I feel like it's just the last two years is really. We've seen some good movement. I mean, it's taken a while. [00:27:39] Speaker D: It's taken a while. [00:27:40] Speaker B: It has taken some while. A while to just. And, you know, I can remember people even saying back then, like, you know, is it cost effective? It doesn't matter if it's cost effective. We have to do it. But I, it's. If it's not cost effective, they aren't [00:27:53] Speaker D: going to do it 100%. [00:27:55] Speaker B: They're not going to do it. Unless, unless that, that's when you're like, okay, you know, you have to come in and you have to create, you know, some kind of regulation that forces the expense, you know, and so if there's a way to, to make it where economics make things happen, then, then it can be more sustainable. It can be. [00:28:15] Speaker A: You also wind up with a thing where it can be a win economically and a massive win from a PR standpoint. [00:28:22] Speaker D: 100%. [00:28:23] Speaker A: Like, you go in, you're like, like, you know, you have somebody that, and I'm not picking on Chevron, it's just a name that you brought up. So I'm going to use them as an example if they've got an opportunity to say, listen, you know, we're, we're rehabilitating the, the Pecos river with our produce water. This is, look at what we're doing for the environment, you know, because everybody has, you know, the vast majority of people that have known intimate, intimate knowledge of how the oil and gas industry works, they almost entirely have a negative mindset on it. [00:28:55] Speaker C: It's like data centers. Everybody hates data centers. They don't know what they do. [00:28:59] Speaker D: Yeah. [00:28:59] Speaker C: Like, I mean, how much of that water can go if you put them in there? They have, yes. Natural gas having to pay to get taken away. It's just being flared off. They got water. You got, yeah, put them all down there. [00:29:12] Speaker A: It reminds me of something. I want to finish my point, though. But when you go in, you're like, then Chevron can say, listen, here's, here's our commitment to the environment. We're now, you know, all this stuff used to go down. We've reduced our, in salt water injection by this much and we're using that, we invest in, you know, we got this new deal we partnered with and [00:29:28] Speaker B: now we're, we heard some of that language at the Pecos meeting, at the watersquest Texas. [00:29:33] Speaker A: And you're gonna see that. I mean, it's a good thing for them. But what you're talking about. I saw a deal. I told Tory about this last week, but we're not on the radio show. But there is a company in New Jersey that has filed a patent for a new form of data center. And they bury it. They use geothermal for cooling. They bury it and they put solar panels on top of it. So no part of the data center is visible. All you see is solar panels, which, I mean, I don't like solar panels because they look ugly. But, you know, nobody asked my opinion on it anyway, so. But, I mean. But you know, the thing about the produced water and you're Talking about from 2021, you know, 2021 to 2026 is a blink in time when it comes to look at. And look at how far you've come from 2021 to 2026. What's it going to be like 20 in 20, 20, 30? I mean, it's going to be. It could be a massive game changer in just three or four more years. [00:30:27] Speaker B: Well, and the way I think about produce water is like necessity is the mother of invention, you know, and if there's a way to make things where you allow business to answer be the solution to that, that's, to me, that's the best way to move forward on a problem. [00:30:51] Speaker D: Yeah, I think you said it best of, you know, being able to continue to run a business and do good things. You know, I think the oil and gas industry gets a bad rap. You know, I will say I think the oil and gas industry has a messaging problem. You know, if you, when you really get in the room with these operators, you know, they want to do the right thing. They do. But this isn't philanthropy. We all have businesses to run. But, you know, when you look at the support we've gotten from, let's. I'll say Exxon to begin with. You know, Exxon has opened. When you talk about a company that has the scope and the footprint that they do, how many hundreds, if not thousands of PhDs they have on staff? They have opened the doors pro bono for us to work with their toxicologists, to work with their water specialists, their environmental specialists, you know, they have the resources and they want to do this the right way. Now, do they need to make sure that, again, it's an economic calculation, but if we can come up with a program, and I think we're all, as an industry, pretty close to doing it, coming up with A program where you are finding another use and another life for this water while you're continuing to make money on the upstream side. It's a huge win. I will say these last two years, I've never seen the amount of collaboration I have in the upstream industry that, you know, when I said this on a stage a couple months ago, you know, the Exxons and the Chevrons of the world have opened up, you know, just all of their resources to us. Those resources haven't been lobbying to get things pushed through in a quick or wrong way. It's been through the science approach. [00:32:28] Speaker B: Right. [00:32:29] Speaker D: That says, hey, go sit down with our. I mean, they run a. They have a bio. I didn't even know Exxon had this. They have a biopharma team in New Jersey that is some of the sharpest minds in the world. And they've said, full access to them. Bring your water. Let us help you out. The amount of collaboration we've seen that we are at the precipice of something that can be really neat in this industry. And, you know, that we, you know, you talk about the environmental problems in West Texas that, you know, again, weren't upstream problems, upstream world problems, the decline in the Picus river, the Kleining, the Ogallala Aquifer of what it's done. I think everybody's seeing that. Look, you've got an opportunity to do some really cool stuff here. And then we have champions like, you know, Senator Perry and. Or Chairman Perry and Chairman Darby that have walked with us hand in hand to say, look, these guys have put the money into the science. Let's get them on the right path to do this. [00:33:19] Speaker B: Yeah. Well. And I mean, a lot of the things that I feel like, I mean, you can't drive through and drive on somebody's land and not. We had. In fact, we had Skyler white here. [00:33:32] Speaker D: Love, Mr. White. [00:33:33] Speaker B: Yes. Yeah. So. And we looked at, you know, some places and he was showing me some. He was showing me some salt built up in the Pecos. Have you seen those pictures? [00:33:41] Speaker D: Yes, ma'. [00:33:41] Speaker A: Am. [00:33:42] Speaker B: It looks like snow. [00:33:43] Speaker D: It's a. And, you know, I think one of the biggest misnomers, and I think it's good to point out, if you look at Beamer Lake. [00:33:52] Speaker B: Yeah. [00:33:52] Speaker D: And, you know, there's some other ones. I can't say they're. They're named after. Are named after some folks that is not a produced water problem of what's occurring down there. If you look at what happened down there, a lot of those wells were drilled Exploratory wells back in the 40s and 50s. [00:34:11] Speaker B: They're very old. [00:34:11] Speaker D: They're very old. And you can go through a program through the ROW Commission, it's called P13. And you know, I did it all the time when I was in the oil and gas industry. We drilled a well, it was a, you know, let's cut with dry hole or the well, it's been its life. You can do a plug back and so when you do a plug back, you'd plug that back, you hand it over the landowner, you file a P13 and then you plug it back and perforate the zone that now it's a fresh water well. So back, you know, if you look down in that Imperial area, you had some old wells and some of them were plugged back into the San Andreas. And San Andreas, believe it or not, is pretty fresh water over there. It's about 3,000 to 7,000 parts. And those became water supply wells for Imperial and Palisades. What happened over time, it is a zombie well problem. It is not a produced water injection problem. There's very little injection over there. But what happened is you had those zones start to corrode on you, the upper zones. So think about the Salado and the Yates. They're pretty nasty formations. What happens? That casing corroded and now you're getting intrusion from those other zones. You're still getting that hydrostatic head push of the San Andreas that's bringing that water. [00:35:17] Speaker B: Because let me tell you something, that, that St Andrews is pushing water out. [00:35:21] Speaker D: It's pushing water. But what's happened is think about the zones above it now, the Salado, which is a really nasty zone. That casing is corroded and now you're getting Salado water entering that casing with San Andreas water pushing up as the head. And that's the salts. That's Beamer Lake. Beamer Lake was actually drilled in 1952. That well was drilled in 1952 and it was a freshwater well that was used for irrigation in the area. But. And I think it was 3,000 parts. Now it's coming in as high. And this is a really interesting thing about the. The Beamer Lake. Beamer Lake can range in quality depending on when you go sample it, from 30,000 parts to 200,000 parts because it's just wind, the contribution from those other zones. There is a push in industry right now. It is a. We want to go fix that. It is a. They're going to be very complicated plug jobs to go do. But it Needs to be done. But people need to understand that was not caused by the injection over the last eight to nine years. [00:36:18] Speaker B: That's interesting because that's what I've. My assumption has been is that. That it's the pressure it's creating that there. [00:36:24] Speaker D: It's a zombie well problem. It is not a produced water. [00:36:27] Speaker B: So. But are the zombie wells not. I thought that they were becoming like this leak leaking because of the pressure in other areas. In other areas they are. [00:36:41] Speaker D: Okay, so take a blowout well or. Okay, so take a zombie well at Beamer. Beamer is caught. It's a zombie well. It's. You've had casing corrosion. It's now leaking bad formation water in. Take that same example and put it in a high pressure zone more in the core of the basin, say bluffing county. [00:37:00] Speaker B: Okay. [00:37:00] Speaker D: Loving county. Now in a zombie well. So let's say you've got an old well that was P and a in the 1960s, 1960s. They probably didn't. Have you heard presentation last week plugging standards in the 1960s? [00:37:13] Speaker C: That piece of telephone pole, a bowling [00:37:16] Speaker D: ball, four burlap sacks and some cow dung. [00:37:19] Speaker A: Yeah. [00:37:20] Speaker D: Was like, you know, they weren't done. And so then. Now that is a pressure problem in those zones. Because now you're seeing the dmg, the Delaware Mountain group is the main disposal zone up there. Let's call it 4,000 to 6,500ft. So what's happened is now you're getting disposal there and some zombie wells and it's blowing out plugs. [00:37:38] Speaker B: Okay. [00:37:39] Speaker D: It's blowing out a sub. It can't handle the pressure of today's injection. So both of them are zombie well problems. One of them is caused by produced water injections, more in the heart of the basin. One of them is caused just by corroded casings. If you look at how many wells there are in the state of Texas. Pull up P and a well map and zoom out. And it's just one giant dot IT is. And so the new road commission rules are addressing that. The new road commission rules where they've expanded the half mile, what they call an AOR or AOI area of influence. [00:38:13] Speaker B: Right. [00:38:13] Speaker D: You have to go in and you have to prove seal on every well that's going to be in your disposal zone. If you can't prove seal, then it's on you to go in and. And replug those wells before you start injecting. So the commission is addressing it. [00:38:26] Speaker B: Right. So did the commission update disposal rules last year, year before it was Summer. [00:38:33] Speaker D: Did that go through? It was summer 25, I think, when place. Yes, ma'. [00:38:37] Speaker C: Am. [00:38:37] Speaker B: Okay. All right. I wondered about, I mean, I knew they did, but I, I've been trying to get an update on how all that went because we actually, the organization that I run actually helped do some landowner outreach because, you know, they clawed those back for a while. [00:38:53] Speaker D: Yes, ma'. Am. [00:38:54] Speaker B: So we did some landowner out, you know, outreach to help people like make comments about how they felt about, about that and what should be done. [00:39:02] Speaker D: So it has changed how you site a disposal well. Now I will say that it is. You have to look at the P and A wells, you have to pull well files and then you have to go in and repl. If you want to drill a disposal zone and there's a P and A well within a half mile zone of your new injection well and you can't prove it, you will go re. Enter that well and re plug. The commission is they have a Herculean task in front of them. You know, not just approving all these permits that are coming in, but then also their P and A program, you know, their P and O, they're setting records every year on the number of wells they're P and A in. They've just got a lot in front [00:39:37] Speaker B: of them to do so in like the, the cost. So I'm trying to remember which. I think it was the water meeting in San Antonio. The same guy spoke on the ones that are plugging these big wells. Like they had $10 million and to start plugging wells and one has cost like eight. [00:40:00] Speaker C: I was gonna say that won't go very far. No cost, 16 to drill and 10 [00:40:04] Speaker B: to plug, 2.5 in concrete. [00:40:06] Speaker D: It all depends on what you experience when you get down there. [00:40:09] Speaker B: Yeah, that's what he was saying is like. Because somebody asked him, I think it was at that meeting, you can have enough money to finish these. And I was like, no way. [00:40:18] Speaker D: It could be as cheap as a couple hundred thousand. Yeah. If you have to think when you get down in there, is your casing parted? You know, where do you have to sidetrack? It can be as low as 150, 200,000. It can be in the mill. [00:40:32] Speaker B: So do you think that this, this problem that we have with the orphaned wells, that do you think it's going to kind of be the same thing that we're seeing, the innovation that's coming through with produced water, that we're going to see some kind of innovation in new technologies to plug those wells better, [00:40:51] Speaker D: safer, you Know you can't when you get down hole, you know, yes, we can. You can do it more efficiently but. But you can't ever over engineer what you're going to find down hole. And so yeah, there's improvements in how they do it. There's a. Everything has gotten more efficient in our industry. But what you experience down hole is what you experience down hole. Everybody's got to think that the reason produced water desalination thing of beneficial reuse is just to reduce the amount of water that's going down hole. If you reduce the amount of water that's going down hole, then you reduce the pressure that that formation is experiencing, which will stop so many blowouts. [00:41:28] Speaker B: Yeah. So, okay, let's just say that we get up to like everything that's everything, everything at a daily rate is all being processed and recycled and going all places. Are you talking about, you think they'll ever be retrieving any of that water that they've put down there? Is that even possible? [00:41:50] Speaker D: I mean, you could. Right now you. Nobody needs to. [00:41:55] Speaker B: No. But I'm just thinking how much are you down there now? [00:41:58] Speaker D: I mean, you know, maybe my grandkids. Grandkids, you know, they need. You could. You could go down into the Delaware Mountain group and you could drill a well and stick a pump down in it. Actually probably wouldn't even need to. It'd probably flow on you. But you could retrieve that water one day. [00:42:13] Speaker B: Yeah, well, I wonder about, you know, in 50 years or so when the aquifer, the Ogallala is, you know, you can't even access it anymore because it's so gone. If there'll be potential for, you know, finding that there's other waste. Because I don't, I mean, I don't feel like that this, the fracking. The amount of water that we're getting has just increased since fracking. I mean it like. So I feel like as technology barrels a day. Yeah. I mean, you know, so as technology changes, who knows? You know, you knew that there was water in there, but you didn't really anticipate maybe the amount that's there. And so it makes me think. I think of produced water is new water. [00:42:59] Speaker D: It is. [00:42:59] Speaker B: It's water that we never would have had access to. [00:43:02] Speaker D: Never been in the hydrologic cycle. [00:43:03] Speaker B: Yes, that's what I think. It hasn't has any. [00:43:06] Speaker C: Unless they use fresh water to frack it with. [00:43:09] Speaker D: That's true. [00:43:09] Speaker B: Well, that's true. [00:43:10] Speaker C: You don't get that back. That's one thing people have trouble with is that Kind of disappears, but now you have the chance to recover that. [00:43:17] Speaker D: You do. And if you want to think about our ultimate goal, our ultimate goal is aquifer recharge. So think about three camps of where, what we can do outside of industrial use, and we'll talk about use in data centers, which is a huge focus right now. If you think about the three camps of what you can do with that water. Land application. Land application is what we're doing right now. [00:43:37] Speaker B: Yes. [00:43:38] Speaker D: You can think about agriculture, what Western is doing, growing corn, what we've done, growing alfalfa, native grass restoration land apply. There's kind of three stipulations when you think about land apply. It can't run off into waters the US it can't leave the lease lines and it can enter the aquifer. So what does that leave? It has to stay in the soil and root zone of the, of the zone. You have to. And that's what we've done. You know, one of a. You know, we have a research development center south of Midland where we've been proving, you know, what is the carrying capacity per acre for a long time. And so you have to think that's affected by ambient temp. How much evaporation do you get and then how much, depending on what the ambient, what the ambient temp is and what the crop is, how much is going to be soaked into that soil root and vadose. [00:44:26] Speaker C: Yeah. [00:44:27] Speaker B: So you've got to literally prevent it from going back into the aquifer 100%. [00:44:30] Speaker C: It sounds just exactly like effluent water. [00:44:33] Speaker D: It is. [00:44:34] Speaker C: They basically just took that and slapped it on. You said, hey, you're gonna follow these same guidelines that we do for sewage water. [00:44:39] Speaker D: And that is land applied as in its essence. [00:44:42] Speaker C: Yeah. [00:44:42] Speaker D: So the TLAP program through the tcq, I can't remember exactly what Texas Aluminum Land Applied program. Those are the stipulations of land applied. The second is going into the waters of the US So, and that's what we're doing through our TCEQ apartments right now. The third is aquifer recharge. Right now, aquifer recharge utilizing produced water is not allowed. [00:45:04] Speaker B: Right. [00:45:05] Speaker D: Because if you look at the program that's down from the EPA to the tcq, you can't do aquifer recharge using a waste product. So it's going to be a lot of the focus over the next couple legislative sessions is produced water is considered an oil and gas waste. We can use oil and gas waste for land applied. We can use oil and gas waste for discharging the waters. Us under the TLAP and TIPTease programs, those are allowed in state. In state mandates. There's nothing that in the rules right now that allows aquifer recharge. So aquifer recharge that occurs right now. I'm sure y' all have heard of aquifer storage and recovery. That is usually usually utilizing excess water from somewhere like San Antonio does it. San Antonio does it. In high Edwards Aquifer flow times, they take high water from the Edwin, they pump it into the Carrizo Wilcox Aquifer, but it is still fresh water. And then they bring that water back up later. We need to change that rule that allows it. Because if we think about. If you do the calculations on the amount of pore space, we could put soaker hose in the Ogallala and you could soak the Ogallala for the next 200 to 500 years and never fill it up. [00:46:14] Speaker C: Yeah. Which is very. That's. [00:46:17] Speaker B: That's right. [00:46:18] Speaker C: Yes. That we've used that much water in the last year, 50 years. [00:46:21] Speaker D: Same thing in the Pecos Valley Alluvium. The Pecos Valley Alluvium, the Edwards Trinity Plateau. You know, we have an ultimate goal, and the industry does, of just start recharging aquifers, because then that is not going to be. Think about Land Applied. Land Applied is great. It's going to help the native restoration, but it's. It's finite. Think about discharge into the Pecos River. It's great, but it's finite because that water is going to pass by. It's going to go down into the Pecos. Think about aquifer recharge. Aquifer recharge is a way for us to now because eventually the only gas in the Permian will stop. It might be 50 years from now. But think about what we could do in aquifer recharge to fill aquifers for the next 40 to 50 years. And we could add. I think if you could add 200ft back into the Ogallala or 200ft back into the Pecos Valley Alluvium, that gives us that bang. [00:47:10] Speaker B: Well, I think something that'll have to change too is I feel like we have. We have just had an extraction mindset and I think this is forcing us to think about putting back. But if we put it back and then we extract it at the same rate. You know what I mean? So we have to. There's got to be some type of balance of recharge and extraction, you know, which is, I know what other states are trying to do like Kansas and places like that is like how can we not, not quit using water totally, but how can we create a balance, [00:47:44] Speaker D: more sustainable farming practices? [00:47:47] Speaker B: Well, yeah, I mean, I don't know how that, I mean, I feel like where we are, we just have the worst of the worst where we are, I mean, we just don't have any, we have no recharge. We don't have any fast recharge like anywhere else. [00:47:58] Speaker A: If you go back in and you look at, if you did figure out a way to recharge and you talk about adding 200ft into it and then you go in and we're no longer using flood irrigation on the southern high plains. We quit doing that in the 70s, 60s, 70s. We're no longer using, you know, rain, bird overhead sprinklers. We're not using water drive valleys anymore. You know, we're, oh, we've, we have definitely cut back down to, I mean, subsurface drips. It's all gone. All you could get everybody, you know, and you look at, I mean if you look at in Terry county this year and you drive around and you try to, and you find a good field of cotton and there's only like three out there. Well, they're all drip, they're all subsurface drip. You know, all the rest of it, they turn the water on. They're like, I don't have enough water to grow. We have enough water to supplement a crop. [00:48:49] Speaker B: Well, when you look at evapotranspiration this year, like I know it's like you can put down 2 inches of water and you're still negative 1, 100%. [00:48:59] Speaker D: The evapotranspiration rates, taxes are real. [00:49:01] Speaker B: They are real. And I think that that's one. You know, the organization I run, we, we have a partnership with NASA. And so I mean those are the kind of things that we're looking at is how do you, how do you put all those tools together in a way that's really easy for farmers to use and free because it's paid for with our tax dollars, you know what I mean? So that they can actually see if it's like what's worth doing, you know, and what does have to change and how can we, how can we. So maybe you can say let's balance how much we go back into grassland and then we keep a certain amount, you know, in row crops so that we don't mess up our row crop structure, you know, because once our infrastructure is gone, it's gone, you know, and so that's what worries me about our region is how far do we push it to where then, you know, no one can grow peanuts, nobody can grow cotton. [00:49:59] Speaker A: And then the infrastructure, look at the infrastructure for grain. Sorghum is almost entirely gone. I mean it's the one of the most drought tolerant crops that we can grow on the high plains. But it's got two problems. The infrastructure's gone and it's not working well. And even that $4 a bushel and what are we making on 30, 30, 40 bushels? [00:50:16] Speaker C: Probably the average. [00:50:17] Speaker A: I mean, you know, you're talking 160 bucks an acre. [00:50:20] Speaker C: The property taxes take all that up. [00:50:23] Speaker A: Yeah, between rent and property taxes and buying the seed, you're probably pretty much over with there. But if you take it where you have produced water, putting back in here and you look like, okay, we're gonna try to limit, we're gonna try to control how much water comes out of it. Then you look at a high value crop, right? [00:50:37] Speaker B: That's what I say to you. [00:50:39] Speaker A: But the problem with how you know that again, everything's got a trade offs, you know, high value crops, you know, something like, let's just, for instance, let's just say lettuce, okay? Only so much lettuce needs to be made in the US and it's shipped everywhere. But you know, you go out there and you're growing lettuce and you get one nice little hail storm come across and you don't have lettuce to sell anymore, you know, because it's not a grade, it's not number one. You know, it's the same thing with, with this. Same thing with watermelons, with pumpkins. You know, you look at the number of watermelons that are grown that are number twos and you look at a number two and it's like, man, that's terrible. [00:51:12] Speaker B: You know, I have about 50 of those in my living room right now. I'm not kidding. I have, my, my youngest son is a watermelon fanatic. And we have, we have friends that grow them. And so he goes twice a season and gets about 50. [00:51:27] Speaker D: Where'd he go? [00:51:28] Speaker B: It's Welch. Close to Welch. Between Brownfield and, and Welch. Yeah. TNS produce. TNS produce. And so he goes and fills up his vehicle. So we have, I think we have probably 20 left now. So he'll at some point. [00:51:43] Speaker D: Red meats or yellow meats, they're all red. [00:51:45] Speaker B: They only grow red. [00:51:46] Speaker D: I love yeah, he. [00:51:47] Speaker B: I'm like yellow meats. I think so. I mean, that black diamond, yellow meat. [00:51:51] Speaker A: My problem is I like black diamond red meat. So, I mean, you just don't see [00:51:55] Speaker D: those very much southeast of San Antonio. It's like a point of pride. [00:51:58] Speaker B: It is. [00:51:58] Speaker D: No, it's like the luling area down. [00:52:01] Speaker C: Oh, yeah. [00:52:01] Speaker B: Yes. Let me tell you. [00:52:03] Speaker A: Strawberries. [00:52:04] Speaker B: It is. And I have been to those. One of those watermelon processors there. And let me tell you, that watermelon skin. [00:52:10] Speaker D: But I mean, they're almost swamped down there where they grow. [00:52:13] Speaker B: That is. It is a swamp. [00:52:15] Speaker D: It's that. And you got that black, fertile soil when they're growing them down on those creek beds. But I think you said it best out here. You know, we. We do a lot of groundwater. We did in the past, and my past life is groundwater. And we judge everything by effective recharge. And if you look at, you know, I've done projects in East Texas where effective recharge is. If you think about, you know, your starting point is an enter rain, what are all your debits to that inch? Rain of what enters the aquifer or what enters the soil for growing. Effective recharge in East Texas can be as high as 40%. It's a humid environment. Your evapotranspiration is lower. It's a big pile of sand. You get, you know, you get good rates. [00:52:54] Speaker A: Yeah. [00:52:54] Speaker D: Effective recharge out here in West Texas can be as low as 1 1%. [00:52:58] Speaker B: Yes. [00:52:59] Speaker D: Drip, irrigate, subsurface drip has to. It has to take hold in West Texas. [00:53:05] Speaker B: So here's really interesting. So one of the companies that I've been working with is called ndrip. And so it's kind of. It's a subsurface drip, but they also have a really great soil moisture probe that has horizontal tape and it takes in the plant root information. So it's. I mean, and it also. The thing about soil moisture probes is they don't usually get that top 4 inches of the soil. These do. So it kind of. They kind of built it to solve a problem for soil moisture reading for drip. So they work with large corporations who will buy the equipment and then in return for the conservation, you know, gallons of water that's been conserved, you know, so for corporations that have water, you know, they've got water, whatever you call it, standards or water goals that they want to meet. [00:53:57] Speaker D: Okay. [00:53:57] Speaker B: Yeah. And so they turn around and then give those to farmers. So I don't know how many we've given out. That's pretty amazing, the soil moisture probes this year. But we also have a lot of. A lot of drip that's coming in too. So I'm pretty excited about that. [00:54:12] Speaker D: Well, because you're right, because you don't want to. Let's say we bring all this water up, you know, we treat this produced water and it's used for ag, or we treat it and it's go to aquifer, recharge. You're right. We don't want to go through the same practices and burn through it all again in the next 20 years. [00:54:25] Speaker B: Right, right. But to me, I'm like, one of the best things we could do around here is pick the best water we still have and convert all of it. It's. So farmers cannot afford it. [00:54:34] Speaker D: That's right. [00:54:34] Speaker B: They cannot afford it. [00:54:35] Speaker D: There's gonna have to be subsidies involved. [00:54:37] Speaker B: So there has to be help. And to me, this is like a great way for an organization that needs those water credits to come back in. And when we work with NASA, then we can look at. They can, you know, with their remote sensing, they can give us a really good estimate of the water, groundwater that's used or groundwater that hasn't been used. So we can go back even now, you could say a farmer that said, hey, I'm, for example, I'm turning my water off because I know we don't have it. And if. I know if I want to continue to farm, I've got to figure out how to do it without. If I want my kids to stay, I have to do that. So they say they turned their, you know, irrigation off five years ago. We could even go back historically and look and see how much. And then you can. Those organizations can buy that per. Per gallon or however they need to do that. You know what I mean? And it's verified. [00:55:32] Speaker D: That's pretty amazing. [00:55:33] Speaker B: It's verified. Yeah. [00:55:34] Speaker D: And what was the company? Indrip. [00:55:36] Speaker B: Indrip. So, but this is a program that the. The organization that I run, the Sand Hill Area Research association, this is a program that we. I put together. [00:55:45] Speaker D: Very neat. [00:55:46] Speaker B: And so I connected with NDRIP because they reached out to us to help find farmers for the, you know, drip tap, for the soil moisture probes. And then we've just been collaborating on, you know, trying to get the word out and get folks interested and. Because I. I think for, like, where we are from south of here, it could be what saves a community 100%. It really could be. And I mean, and to me, like, you want to talk about good pr, you know, to be able to go into community. If you combine that with converting to changing some of it, some of that land back into grassland where you've turned completely turned off. I mean, we looked at. So we looked at. If you took six sections in Terry county and did this, the average would be just shy of a billion gallons a year. [00:56:37] Speaker D: Wow. [00:56:38] Speaker B: And that's 2,222 60 acres. It's a little over 2,000 acres. [00:56:46] Speaker D: Wow. [00:56:46] Speaker A: That's a thousandth or six, 1/6 ten thousandths of Terry. [00:56:52] Speaker B: Of Terry, yes. That's. That's just like. That is not even a drop in the bucket. Yeah. So many people have goals by 2030. We can help you meet those by 2027. [00:57:00] Speaker C: Get so tickled. If people talk about, you know, water use for data centers, I'm like, don't talk about the farmer next to it. [00:57:07] Speaker B: Yeah. [00:57:08] Speaker C: If I'm farming next to you, don't. Don't throw that out. [00:57:10] Speaker B: Because let me tell you, like, you [00:57:11] Speaker C: use how much it's coming up half the time, like. [00:57:16] Speaker B: Yeah, it's coming up in water meetings now. I remember the first time I heard somebody say it. [00:57:21] Speaker C: I was like, oh, yeah, yeah. The. Finally. The cat's finally out of the way. Hey, what if you only had to. You said something while ago about like, it was tongue in cheek, but like. Well, I'll just. If it's going to cost that much, I'll just send it to the, to the Gulf. Could you just clean it up enough where it was like seawater and, and do it like. I mean, I'm not saying I want you. No, I want it to be like, to be used, but could you stop the process there? You could, I guess, since it's frozen. I mean, I don't know. [00:57:47] Speaker D: No. If you look at. Before we go through our. Oh, worried about seawater. [00:57:50] Speaker C: Yeah. [00:57:50] Speaker D: But you have to think there's also a lot of other unwanted analogs. [00:57:54] Speaker C: No, sure. Like selenium and lithium and up barium, [00:57:57] Speaker D: strontium and all those. That's what RO removes. [00:58:01] Speaker C: Yeah. [00:58:01] Speaker D: So you've got to get it down to 250 parts of salt. So 250 total parts. [00:58:06] Speaker C: Right. [00:58:06] Speaker D: To get all the unwanted out at the same time. [00:58:08] Speaker C: Right. [00:58:09] Speaker A: I have a question about the, about the leftovers. You know, you mentioned several different elements that are, you know, relatively high value. Lithium in particular. [00:58:17] Speaker B: Yes. [00:58:18] Speaker A: Is there. Is anybody looking at mining techniques to mine the, the water? And I say mining in the general terms of getting an element out of something. [00:58:27] Speaker D: Yeah. So we call it beneficial Analytes. [00:58:30] Speaker A: Okay. [00:58:30] Speaker D: So actually there's. There's one active plant right now through. Oh, what's the company name? Element3, in conjunction with Double Eagle. So they have the first lithium carbonate plant in West Texas. That's in the Midland Basin. [00:58:44] Speaker A: Go Double Eagle. [00:58:46] Speaker D: Yeah. They were the first to do it. As you would expect with John and Cody. They're usually the first do a lot of things. And then you also have Liberty Stream signed on with Select. They're doing a plant in Big Spring. We will have some on our effluent stream. So lithium concentrations of produced water in the Permian are relatively low compared to other basins. But the, the kind of math behind it is, yes, you've got less per barrel, but you got a whole lot more barrels. And so what a lot of these companies like Liberty Stream and Element Three have been working on is in. Okay. How do you reduce that input cost, that extraction cost per unit. [00:59:27] Speaker A: Right. [00:59:27] Speaker D: To be able to harvest all of this water? [00:59:30] Speaker A: Yeah. [00:59:30] Speaker D: One good thing about Desal is you have to think when we compound, we compound everything. And so you compound lithium as well. So let's say average. Permian is probably. I'll say Permian, Delaware and Midland as a whole is probably average is 30 parts per million of lithium. We're compounding, we're compounding to. Let's call it 55 to 70, depending on your compounding. That helps those economics. So iodine. There's a lot of folks chasing iodine. Lithium and iodine are probably the biggest two right now. Western made an announcement that, that they're chasing iodine, and they've signed on with a critical mineral extraction company to do iodine and then your first two lithium plants. [01:00:09] Speaker A: So if you could. If you could, you know, that's, you know, obviously that I expect. I fully anticipate that that technology will get better over the next five, 10, let's just call it 10 years. And so, you know, you wind up with, okay, well, it's constant X. Well, you know, whoever's getting that is buying, so it's spreading that cost of getting your water completed out the door so that if there's more things that. More revenue that comes off of that thing, then it's going to make it where you're part of that thing. You are spotted less of a tax on whoever's doing it. [01:00:46] Speaker D: Anything we can do, and we say this all the time, we have a saying in house. Let your technology stand on its own two feet. And when we say let it stand on its own two feet is have a Technology that's not dependent on the sale of that effluent barrel or the extraction of anything out of that effluent barrel and stand on its own two feet means that I can go to an upstream operator and say, okay, I can quote you a price per barrel and I'm going to take and I can treat and discharge that water. And I make money in that process. Now, that's great. We want it to stand like that. But then any economic benefit of that effluent barrel, all it does, it's gravy. All it does is just help you reduce that input cost. Extract the iodine, extract the lithium, sell that treated barrel of water to a data center. Anything you can do downstream helps the cost of the. [01:01:34] Speaker C: What does it cost them right now to just have like a truck come up and take it to a saltwater well disposal place? I know that's a loaded question because it could be 10 miles or it could be 50 miles or. [01:01:45] Speaker D: Well, it's all piped these days. [01:01:47] Speaker C: Oh, it's all piped. It's all piped. [01:01:49] Speaker D: So you have to think the amount of water that, you know, you saw this shift. And I'll back up a little bit. 2017 is when the Permian, I think we were in that downturn 14 to 16. When we came out of that downturn, it became Permian. Permian, Permian. You know, you got to think before then, Eagle Ford was bigger than Permian in 2010 through 2014. Well, when everybody started 2017, you know, you saw the focus on the Permian. That was when the water midstream sector really was born because it became too expensive for an operator to start dealing with water. [01:02:22] Speaker C: Right. [01:02:23] Speaker D: You know, you got to think water was always dealt with before in house at the operator. Exxon handled Exxon's water. Chevron handled Chevron's water. Well, their oil and gas was never handled in that way. There was midstream. You know, they didn't, you know, they no operator built their pipeline, their own pipeline to the Gulf of Mexico. They went in and you combined all of our oil together. Water started taking that turn in about 2017 because we all saw what the volumes were going to be. It wasn't economic for an upstream operator to handle their own water in house. Take four different operators water and handle it together. That was the birth of water midstream. That's when Texas Pacific Water was formed. Solaris bought by Western NGL's. Big push out here. You know, all of these water midstream companies. So that's when we started putting in the pipe. So when you ask on that what that average price per barrel is, we call it a takeaway price. And so the way water midstream works is let's say that that solo cup is a chevron tank battery. We will a water midstream company will build a pipe to that tank battery and then they tie it into their giant conglomerated system. You know, you're talking each company probably has 600 to 2,000 miles of pipe in the ground where we're collecting everybody's water. That you would say average price today to take that water from that tank battery, 75 to 80 cents a barrel. [01:03:44] Speaker C: Okay, so you're right there at it. [01:03:46] Speaker D: We're not there yet. That 75 cents a barrel, that's a stretch. And let me say what makes you know, if you look at desal, 80 per 75 to 85% of your cost of D cell barrel is your energy input. And so that is what makes and break you is that energy input. So what do you have to do? Two factors. We call it an intensity. A kilowatt per hour per barrel treated. How many kilowatts per hour per barrel does it take you to extract that barrel of water? And then what is that kilowatt per hour cost? And so you want a low intensity obviously you want like a 2 to 4 kilowatts per hour per barrel treated. And even if it's gas you can convert, you can still do the same math because that that mcf of gas has a kilowatt per hour equivalent or it has a waha price per equivalent. You know, what is your input energy cost and what is your intensity to do always has to be at scale. And this is what we tell people and we've been completely honest, 10,000 barrels a day. At 10,000 barrels day you'll be over $2 a barrel because you have so many fixed costs you have to over. So you've got, you know, and it's the same thing of a recycle system. You know, recycle system, you're not really making money until you're over 20,000 barrels a day. You got to overcome the labor, you got to overcome all those site costs. Then when and desal is going to be a little bit higher decile is going to be probably 80 to 100,000 barrels a day. That's when you're at that spot where you've overcome those fixed costs. Now you're just dealing with the variables. And that variable cost is energy. And so what we're all chasing here here is how do we bring that energy cost down. It's not gas. Yeah it is why the data centers want to be. It's not gas. So our site runs off of nat gas generators. Turbine generators. [01:05:30] Speaker B: So how long does it take to build a natural gas generator? Because is that a problem? [01:05:37] Speaker C: I heard old company owned all of them. Right. They can only build like what one or two a year or something like that. [01:05:42] Speaker D: I'll tell you. Buy Caterpillar stock. [01:05:45] Speaker C: Yeah. Well then they're taking old airplane engines and that won't fly anymore and converting them like office triple sevens or 747s into generators. [01:05:54] Speaker D: It is a very complex piece of equipment to build. You are taking a jet engine and making that jet engine almost be portable to produce megawatts upon megawatts of energy. It's not that it takes. It does take a long time but the demand for them right now. Caterpillar a couple months ago opened up their 2031 or 2032 book of business. That's to get in line to take delivery in 2032. [01:06:25] Speaker B: That's what I've heard. [01:06:26] Speaker D: And it was sold out in three weeks. [01:06:28] Speaker B: Yeah. So that. And that's what makes me like. I know we heard about the state the data center putting in in Pecos Project. [01:06:36] Speaker D: Kilby. Yes ma'. [01:06:37] Speaker B: Am. Yeah. Which sounds you know like a. I had some questions. [01:06:41] Speaker A: Yes ma'. [01:06:42] Speaker C: Am. [01:06:42] Speaker B: But that was one of them was how long is it going to take to get. Because it's going to run off natural gas. [01:06:49] Speaker D: Depends on how big your checkbook is right now. You can jump the line. If you're willing to pay. You can jump the line. [01:06:58] Speaker B: That's amazing. [01:06:59] Speaker D: It is. You're competing right now globally for gins. You know, data centers. Data centers and just industrial build as a whole. Try to get anything right now. Try to get pad mounted transformers, switchgear, steel generators. [01:07:15] Speaker B: What's causing all this? [01:07:17] Speaker A: We don't make them transformers. We don't make them. I don't think we make them in the United States. [01:07:21] Speaker D: Data center demand. Data center demand on the gins. You know there's very few uses. We had started to use people had started to use natgas gens. You know Diamondback put in their own micro grid in about 20, 2022, 2023. We were starting to do it small scale and you know it didn't take a genius say well man I. I got all this gas. [01:07:41] Speaker B: Yeah. [01:07:41] Speaker D: And I need electric to run my facilities. Why don't I just go buy some gins Pump my gas into it and build my own micro. And so we were doing it small scale but that might be 40 mags and there's yet people can't put all gins in the same category. There's reciprocation, reciprocating gens and there's turbine gens. All these data centers what we're doing, it's turbine gens, it's jet engines. A reciprocating generator you'll see all over the place. But a reciprocating generator doesn't generate the type or not the type how and the volume that a turbine generator does. Turbine generators we have micro turbines so we run little 1 megawatt micro turbines and we sync them together and we can sync up to 10, 10 at a time. The big turbine generators, the ones that Kilby is going to be using which are called GE Vernovas Caterpillar makes the solar gens. Each one of those gens, a solar gen starts at 35 megawatts. The GE Vernovas one gen can produce 400 megawatts of electricity in one gen. Those are giant data center compute style campuses. You know you, it is mind boggling when you look at the amount of electricity that is generated at these campuses. You know, two to five gigawatts at a time. I mean that's, that's a city of Denver. Daily electricity. [01:09:04] Speaker B: Yeah. So one of the, one of the things that you know I think about when you think about life cycle analysis of like the water use in electricity for natural gas I feel like this is part of what y' all are doing as part of that life cycle analysis of water is really making it more sustainable. [01:09:27] Speaker D: It is and I mean I think you know probably need to discuss data centers even though I sometimes some days I hate to discuss data centers. It's a large part of what I do these days is it, it is data centers and desal. And we are, I mean it was announced last week and I'll say we're the water supply for project Kilby. [01:09:44] Speaker B: Okay. [01:09:44] Speaker D: For Chevron, Microsoft and we have. [01:09:46] Speaker B: That's good news. [01:09:47] Speaker D: We have several others in the area and so there's a lot of misinformation about water use. [01:09:53] Speaker B: Yes there is a ton. [01:09:54] Speaker D: First break it into two camps. Water for power generation and water for the data center. I'll say I'll talk water for data center first. A data center has become very water conservative and that is the misinformation that is out there. You know if you look when data centers, when large scale data centers are Being built, Northern Virginia was the hotspot for them. You couldn't go. And so when you in a data center, what are you trying to do? You're trying to dissipate the heat that's coming off of those server racks. You can do that in a couple different ways. The old way people always did things was evaporative and evaporative coolers. They use a ton of water chillers on the roof. Water's coming in, you're taking that excess heat, you're running it through chillers and you're evaporating it out. It's an evaporative cooler. They pivoted from evaporative cooling to closed loop forced air cooling design probably about five, six years ago. And so if you look at the actual demand of what a closed loop data center uses, it is minuscule. It is a couple thousand barrels a year and all that is, is just some losses that you see in the system. Then you have to think of a couple other parts of data center water use, construction and potable water during construction. So when you're pouring concrete on 2,000 acres of land. Yeah, construction water is a lot of water, but we can use pretty nasty brackish water to do that, clean it up a little bit. Construction water is a big water usage, but it's finite. It's only a couple years. Dust suppression, pad compaction, concrete, we don't [01:11:23] Speaker B: suppress, we don't suppress dust. We don't believe in that. [01:11:26] Speaker D: They do on the data centers. [01:11:28] Speaker B: So will you be able to provide that water for the concrete? Will TCEQ allow that? [01:11:35] Speaker D: Well, it is right now. No, we don't have permits in hand right now. [01:11:39] Speaker B: Right. [01:11:40] Speaker D: So right now it's all brackish. And that is, and let me say power gen water is completely separate. Power gen water can use a lot of water. If you think about a, a generator has an efficiency curve. And that efficiency curve is based on relative humidity and ambient air temp and elevation. And so that curve, obviously when it gets hotter, that efficiency is going to, is going to decline. And then you also have combined cycle. So what you're trying to do on a gin is you can use that water and you could, you take that water and you run it through almost, almost like an evaporative, like a membrane system. And that water cools the air going into the, the intake side of the gin to keep efficiency stable. That is going to be a huge [01:12:21] Speaker C: use of basically what you're talking about. The higher the density altitude, the lower, the lower the efficiency is. So there's Jet it was met they used to make. I used to fly and Metro Liner was made out in Kerrville and they. They would have. They had a deal that had alcohol with just basically spray nozzles on the inlet of the jet engine. So if it was so hot they just. It wouldn't run forever. It was just to help it get off the ground and give it. But it lowered the density altitude to [01:12:49] Speaker D: make the airplane that efficiency. [01:12:51] Speaker C: Yeah. [01:12:51] Speaker D: Stay stable. Yeah the whole time and so that's [01:12:53] Speaker C: what you can reach full power. So I didn't think. I never thought about it but it would make. If you're at 5000ft if you're in Denver versus if you're at the coast the efficiency of that engine is going [01:13:02] Speaker D: to be like when think about a. Think about a 400 megawatt gin in West Texas in August. [01:13:10] Speaker C: Yeah. It's not going to be very efficient. [01:13:11] Speaker D: Not going to be very efficient. So what do you want to do is you want to take water and you want to run it in that just same spray nozzles into that inlet of that air inlet system to keep efficiency stable. [01:13:21] Speaker C: Yeah. [01:13:21] Speaker D: That's going to be a huge produce use of produced water in it. The ultimate what we see that marriage between data centers and produced water desal is the gin world. What can we do with the waste heat coming off of those gins and that's what we. That's why we use gin. So if you think about a turbine engine. A turbine engine burns its exhaust heat is between 700 to a thousand degrees Fahrenheit. That's coming off that exhaust. That is free energy. So think about you know this is what gets us so excited every day when we look at a co located data center with a desal plant. We've got NAT gas coming in from the fields. NAT gas is powering the gin. We're taking waste heat off of the gins. That's helping our desaled water. Our desaled water is going back in for inlet air on the gen side and we want data centers and you know it's. It's taken some time. You know when we first met with these hyperscalers like what if I can tell you a place where like you can use all the water you want every day and like doesn't exist my does yeah. Come to the Permian and so we want them to pivot back to evaporative and then use that produced water back in that evaporative. [01:14:26] Speaker B: Okay. Sorry. That's a. That's one of the reasons why I think regulating what type of system has to be used is not a good idea because just you could say, yes, evaporative is bad in this one place, but in this case, 100% it's not. [01:14:45] Speaker D: It is going to be, you know, right now I'll tell you that the data center piece and you made a comment that, you know, people are, they'll talk bad about a data center, but they've never seen one. You know, we try to sit in a room and we try to say what is this anti data center push? And we put it into two camps. One is just the philosophical push back against AI they're just againers. [01:15:04] Speaker C: They're again everything that's right. It doesn't matter what it, what it is. [01:15:07] Speaker D: And look, we're not stopping this AI push that's coming to this world. [01:15:11] Speaker C: No, it's the train that can't be stopped. [01:15:13] Speaker D: It can't be stopped now can we control the applications of it? But I have to think about, you know, we talk about this internally and that's where we get to the second camp of data centers. And it's the functional application of how a data center is built and operated. I can't do anything. We got to learn our place. And our place is not to put the guardrails on what AI is. Our place is to design, build and operate a data center in the most effective, environmentally sustainable way. That's the use of produced water. That's using gas coming out of the Permian. I will say there are some bad, there are some bad data center sightings. You know, I don't think a data center needs to be, be in San Marcos, Texas and using any water and, you know, pulling off Edwards pulled out of the Edwards probably not a good idea, but you know, water and around a big population. Around a big population. [01:16:03] Speaker A: The thing about what you're talking about with the data center and the synergy that you get there, you're taking water that is not in the environment and putting it off as steam back into the environment where it now enters its new water into the atmosphere. [01:16:17] Speaker D: It's evapotransmit. It's part of that hydrolyzing. [01:16:20] Speaker B: Yes. [01:16:21] Speaker A: You know, the, you know, you don't want to know what exactly what the, you know, down what the downrange effects of that, you know, it's the unintended consequences of that's going to be. But I mean, and you're looking at an area in the Permian that's very dry. I mean, you know that in the summer you're Routinely looking at single digit relative humidities out there. And if you're putting that in there, that gets, I mean that just, you know, that may have effects on the weather, but I don't know that they would be that. I think that was what you'd be looking for actually. And like, hey, let's do this and let's see if it does rain more, [01:16:54] Speaker B: see if it helps it rain. [01:16:55] Speaker D: You're gonna see data center legislation coming up in the 27th session. You know, it's, it's Texas. And I will tell you this. I told a hyperscaler customer this a couple weeks ago. I said, if people are pushing back on you in Texas, you might want to look at how you're doing. Right? [01:17:11] Speaker C: Yeah. [01:17:12] Speaker B: And so no joke. And that's why I'm like, hey, all of y' all need to come and be part of my project because it will. [01:17:19] Speaker D: And come to West Texas. If you look at, you know, and so it's Texas. We don't want so put to put legislation in two camps. We can make it punitive by putting in restrictions. What you just said, we don't want to do that. Or you put incentives. And what we're going to probably, you know, I think a lot of focus is going to be on what we're going to support is incentives for data centers and generation to be in West Texas. Are you using off grid generation? Are using produced water in it? And these hyperscalers, they're all for it. You know, the Permian is going to be the next Northern Virginia. You know, if you look at the projects that are just under build right now, AWS in Pecos county. That's the largest air permit ever issued in the United States. 7 gigawatts of off grid generation. AWS is moving dirt today. Chevron Kilby with Microsoft. That is a 2.4 gigawatt project south of Vegas. That is the first two of probably 10 that will be announced. [01:18:12] Speaker C: What about Terrafab Elon's? Is he gonna power his own now? [01:18:17] Speaker D: That I don't know. [01:18:18] Speaker C: Yeah, that's supposed to be the largest building in the world when it's completed. [01:18:21] Speaker D: Just. Did y' all see the, the video? [01:18:22] Speaker C: Yeah, I was gonna, I was about to get to that. I was like, I think all this stuff is like, you know, it's kind of like it happened, but I saw a car go and stay upside down and then it dropped and then it went and did like a little kickback with the roller skate and land we had. It's not. And they. Yeah. He made sure he had a thousand people there last night with throwing video cameras because everybody's like well that's all AI and everybody's like no dude out. There's no wires. [01:18:48] Speaker D: I've never seen anything like that. [01:18:49] Speaker B: Yeah, last night we had, we had. [01:18:52] Speaker A: I'm gonna have to look that up. [01:18:55] Speaker B: Was it last week that we had Lauren here with Port du Plains? No, no, it was a week before that. And, and he was talking about like the finishing out the interstate system, you know and one of the things we talked about was the need for drone stations and maybe charging on the, on the road as you're driving while you [01:19:20] Speaker C: were driving down the road road if they did the interstates. Right. [01:19:22] Speaker A: Wow. [01:19:23] Speaker C: The thing that got me so much, and this is off the subject was how much it cost to build one model. [01:19:27] Speaker B: Yes. [01:19:29] Speaker C: 42 and a half million dollars a mile. [01:19:33] Speaker A: It's bad when we shock a guy [01:19:36] Speaker C: million before COVID and now it's 42 [01:19:38] Speaker D: and a half million to build a mile. [01:19:40] Speaker C: Yeah, that's the whole. [01:19:41] Speaker A: That's the home in the business. [01:19:43] Speaker C: That's the two lanes going each way and the frontage roads and stuff like that. [01:19:48] Speaker D: Tech specific paving is going to be starting next week. [01:19:51] Speaker C: 42 and a half million dollars. [01:19:52] Speaker A: You know what it cost to build a lane mile of. Of street in L. What is it? A million dollars a mile. A lane mile. So like if you've got a five lane highway, it's $5 million. [01:20:01] Speaker B: You should listen to this radio show. We have really good. In fact, I don't. I would like to make this announcement to anyone that's listening that in what about six months ago maybe we did a. We pulled up the county budget and we did a comparison to other different, you know, cities our size and one of the things, one of this. Do you remember the discrepancy that we found was that someone was making about 160something 80,000 I think something thousand dollars. But no one. But there was no. In the budget. There was like no line like who that was. [01:20:38] Speaker A: It was like an employee but. [01:20:40] Speaker B: Well, we know who it is. [01:20:41] Speaker A: Oh really? [01:20:43] Speaker C: So better be careful now. Don't slant. [01:20:46] Speaker B: I'm not, I'm not saying that. Well and, but the guy that was getting it was not using it. He was just putting it. He put it aside into bank and he's giving it all back. But someone in our county was telling him to keep the. It's a long story. Keep the money. But I. The point is we broke that story six months ago and we didn't have any clue that we were breaking the story. [01:21:09] Speaker D: Well, in business always taught you, you know, yes, business to business, sales is good, but when you can get business to government, you're usually going to do okay. Yeah, and that's sad. [01:21:18] Speaker B: Boy, it's moving so much more that direction. Like the amount of contract for the government right now is exploding because I've just, they're like finishing all the federal direct out and moving all this contract in. So it's time to get a contract. [01:21:33] Speaker A: It's always been there. I mean, just look at how much, how much money went to usaid and that just went away. And then when they stopped that, they didn't stop spending the money, they just stopped it through that organization and it went out through everybody else. Now instead of being, you know, hey, this is just going out and, you know, going to wherever it's now, it's like, okay, you spend this money here, you know, so it's a weird thing [01:21:57] Speaker B: we usually start by saying, tell us a little bit about yourself. We just totally skipped right past that. So before we leave, I'd like to really know a little bit about you. Like. And you've got a kid here at Tech? [01:22:09] Speaker D: Yep, got a kid here at Tech. I'll give you my quick backstory. So I grew up in oil and gas. Was never allowed to go into it. [01:22:17] Speaker B: That sounds like farming. [01:22:18] Speaker A: It's like my kids in farming. [01:22:20] Speaker D: Dad said, pick a different degree. So I picked water. [01:22:22] Speaker B: Oh my goodness. [01:22:23] Speaker D: So I have double undergraduate's degree in criminal justice, pre law and hydrology. I was always going to law school to do water law. And summer after graduation, got a chance to go work with Ozarka doing bottled water. Kind of fell in love with that side of it. Skipped out on law school and I was doing bottled water. And then I'd left and we had started large scale municipal supply. My dad called me in 13 and was like, hey, come to a frack this week. And I was like, I don't want to go to a frack. He's like, no, come on. He's like, this water stuff's getting real. So he's like, we're flying you down to San Antonio. So I flew down to San Antonio, went to a frac, fell in love, thought it was the coolest thing I'd ever seen. Also thought it was dumbest thing I'd ever seen on how they did hydraulics and chemicals and things like that. And you have to think that was kind of the growth or the birth of unconventional. [01:23:12] Speaker B: Yes, it was. [01:23:13] Speaker D: And it's not. I mean, oil and gas has the sharpest mines in the world. Back then, they just didn't have water people. And so I signed on with EOG and I ran EOG's programs in the Eagle Ford and the Permian. Started Texas Pacific Water. Moved to West Texas with my son, and I traveled it for five years back and forth from 15 till 20 with an apartment in Midland. Moved there right in Covid. It was a really good time to buy a house in Midland. It was about May of 2020. There were some folks looking to get rid of some houses, so we moved out. My son graduated from Midland Christian and has been fully West Hectored and West Texas indoctrinated at this point. Kid was supposed to go to UT his whole life, and he's like, now I'm going to Tech. And so, yeah, we've been in Midland ever since. [01:23:59] Speaker B: Okay. [01:23:59] Speaker D: Yeah, he's a. He's petroleum major here at Texas Tech. [01:24:02] Speaker C: Awesome. [01:24:03] Speaker B: That's great. [01:24:04] Speaker D: Yes. [01:24:04] Speaker B: That is great. So you're just a West Texas. You're just a West Texas guy now. [01:24:09] Speaker D: I love it. I mean, people say, you know, I could. I could move anywhere I want at this point, and I don't want to leave. Man, I love Midland when I go home to it. I love the camaraderie of the community. You know, everybody's around the industry. You know, you get out here and you also fall in love with the ag and ranching communities of West Texas. And, you know, there's so much synergies between the two, and nobody wants to see the ag side of West Texas decline. Like, nobody wants to see the oil and gas industry of West Texas decline. [01:24:37] Speaker B: You know, probably about five years ago, I went to ag an energy conference. I can't remember which one it was. And I made the comment that, like, you guys realize how much we have in common. I mean, like, everyone thinks we're both ag and oiler trying to destroy the world. Like, and they're like, people think that about ag. I was like, oh, yeah. I mean, like cotton especially. [01:24:59] Speaker C: Everybody's convinced AI is taking the pressure off of some of us. [01:25:01] Speaker B: That's true. That's true. [01:25:03] Speaker C: Yeah. [01:25:03] Speaker D: We're actually the good guys. [01:25:04] Speaker C: Yeah. [01:25:06] Speaker A: Look at what Great Britain's doing to their agriculture. I mean, I saw a study, a report that came out, I think it was from. I came out of the UN two weeks ago that said that Europe is no longer. Can no longer produce. No longer produces enough food to feed themselves. The whole of Europe does no longer produce enough food to Feed themselves before. [01:25:25] Speaker D: Right. [01:25:25] Speaker A: If they don't. [01:25:26] Speaker C: Potato famine or whatever. They didn't have trouble before. [01:25:29] Speaker A: Well, yeah, but that was. That had some extra circumstances where people were. It's kind of like the Ukrainian famine that killed all the Ukrainians. That was artificially done by Russia. The Soviet Union did that. [01:25:42] Speaker D: They definitely don't produce their energy. [01:25:44] Speaker A: No, they do not. Not even remotely. [01:25:47] Speaker D: You talk about a huge win for American energy. As sad as the Russian Ukraine war. I think it woke Europe up. It definitely woke up. [01:25:55] Speaker B: Yes, it did. Definitely. [01:25:56] Speaker D: To where are we going to get our gas from long term? [01:25:58] Speaker B: Poland. I was in Poland right after that store. In fact, we were supposed to go to Russia, but we went to Poland, which was wonderful. If you ever get a chance to go to Poland, you should go to Poland. It's like the Texas of Europe. [01:26:10] Speaker D: Wow. [01:26:10] Speaker B: You would absolutely love. If you love Texas, you would love Poland. [01:26:13] Speaker A: A very good comparison. And I've never been to Poland. [01:26:16] Speaker B: It is. [01:26:16] Speaker A: But just watching their politics. [01:26:19] Speaker B: Polls, polls better Paris polls. Have fought in every war for independence. They fought in the Texas revolution. They came here to fight in the Texas. [01:26:30] Speaker C: Some of them stay here. And so Kolaches. Right. [01:26:33] Speaker D: And so there's all the. Oh, what is it? The Muchigombas and the Jukes. Big Polish community southeast of San Antonio. [01:26:39] Speaker B: Yeah, yeah, that's. That's the guy that. So the guy that took us on this tour is from Poland. He lives in that area. [01:26:46] Speaker D: Okay. [01:26:46] Speaker B: So it's with the Texas AG Leadership Program. But they were really. I mean, they're very concerned. You know, they. It's a real threat to them. It's an everyday threat, you know, and so it's interesting to see them. So they. But they buy 95% of their LNG from Texas. [01:27:04] Speaker C: Yep. [01:27:04] Speaker B: You know, so. But they're working really hard to. To be energy independent. [01:27:09] Speaker D: The growth of the coast is amazing. [01:27:11] Speaker A: It's amazing to me that every country doesn't hyper focus on making sure that they can support themselves. That's just bizarre to me that there's any pushback on that from any, you know, whatever country you're in that you're like, hey, you know, you got to be able to feed, clothe and, you know, fuel your economy and you better be able to do it. [01:27:30] Speaker B: You gotta have a balance. I guess it's like one thing we found out. We've talked about a lot of different topics here. Every one of them are complicated. [01:27:36] Speaker D: Yes, that's exactly LNG exports. I mean, if you think when America. I can't remember what Year. [01:27:40] Speaker B: It was. [01:27:41] Speaker D: Wasn't many years ago when us became a net exporter. You know, LNG exports are going to sustain the upstream economy of America and mainly Texas for a long, long time. And it's an amazing story. They're still not done building middle stream pipelines. There's no more going on. [01:27:57] Speaker B: Oh my goodness. [01:27:58] Speaker D: All going to LNG facilities for export. [01:28:00] Speaker C: When they just keep finding more gas. I mean, it's maybe not as much oil, but they keep finding more and more. [01:28:06] Speaker D: We're going to, we won't ever have a problem with gas. [01:28:09] Speaker A: We're going to have to wrap this up because we're running out of time. But I did want to take one last thing. [01:28:14] Speaker D: Yes, sir. [01:28:14] Speaker A: Okay. How hard with what kind of pipelines. How hard is it to build a pipeline, say to move it from the Permian Basin to Lubbock, Move the produced water? [01:28:24] Speaker D: It's really not hard, is it? [01:28:26] Speaker B: Not hard. [01:28:26] Speaker D: It's not. It's us finding again, the actual construction of the pipeline. I mean, we're, we're building pipelines all over the place. [01:28:34] Speaker B: Let us know what it is. [01:28:35] Speaker A: Is it a steel pipeline or do [01:28:36] Speaker D: they use the mainly poly? [01:28:38] Speaker A: Poly. [01:28:38] Speaker D: Okay. Just about everything in has gone to high density polyethylene. Yeah, that's. [01:28:42] Speaker A: Man, that's great stuff. [01:28:43] Speaker D: You know, I mean, it's, it, it's, it revolutionized the cost and how we lay pipe now. [01:28:48] Speaker A: Yeah. [01:28:48] Speaker D: You know, and you can get up to 72 inch diameter HDP if you've ever seen one go in. I mean, I can walk through the middle of once. [01:28:56] Speaker B: So. So off, off. We have to get back. We'll have to talk back to this because I have a, there's a, a type of irrigation that I think is better than subsurface drip that I'd like to talk to you about. Cost offline. So all this has been great. [01:29:11] Speaker D: My gosh. [01:29:12] Speaker B: Thanks for coming. Thanks, everybody. See y' all next week on the Dry side Network.