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America should eat more chicken. But how many is too many?

“The 1992–1993 Jack in the Box E. coli outbreak” sounds like a randomly generated target article for a round of the Wikipedia Game. But it goes a long way to explaining, well, me.
I was two months old when Washington State health officials informed the public about a massive E. coli contamination associated with hamburgers from Jack in the Box, and 3 months old when President Bill Clinton addressed the crisis on national television. My mom swore our family off eating red meat in response — understandably, since the outbreak largely affected, and killed, children within a few miles of our hometown in the Pacific Northwest. Her steadfastness was reinforced after my brother was born in the mid-1990s, just as another beef-borne illness was making international headlines: mad cow disease, a.k.a. the “United Kingdom BSE outbreak.”
As a result, I grew up not eating red meat, though by the time I was in middle school, this elaborate explanation for why I wasn’t touching my pepperoni pizza at a friend’s Skate King birthday party was beginning to draw odd looks (E. coli and mad cow disease long having faded from everyone else’s memories, Boston Legal fans not included). Things became much simpler to explain after I made the switch to full vegetarianism in high school, though I’d still occasionally get the disbelieving “you mean you’ve NEVER had BACON?!” response whenever someone got nosy about my dietary history and if I was abstaining “for animal cruelty reasons, or what?”
It turns out, though, that my weirdo childhood diet is now frequently touted as one of the best ways to eat for the sake of the planet (take that, Jennifer). Sometimes referred to as “pollotarianism” — which is incredibly confusing to try to pronounce if you speak any Spanish — the act of replacing red meat in your diet with poultry has been characterized by Gidon Eshel, a research professor of environmental physics at Bard College, as “the most impactful change” you can make for the climate “save going all-out vegan.”
I admit I was pleasantly surprised — okay, fine, smug — upon discovering that this would mean I’ve eaten positively for the planet my whole life (even if the aforementioned pollotarianism, and subsequent teenage conversion to vegetarianism, had nothing to do with the environment at the time). I could proselytize giving up beef as an accessible way of trying “to eat in the manner that takes note of the finality of Earth,” as Eshel so elegantly phrased it to me. After all, I’ve actually lived that chicken nugg life!
Recent climate activism has focused on pressuring big polluters and governments and moved away from the emphasis on individual responsibility, but one place you actually can feel like you’re making a meaningful difference for the planet is, in fact, in how you eat. “Somewhere between 20 and 35 percent of all emissions come from feeding ourselves,” Eshel explained. Our diets are “one of the few things where we can really take a major chunk out of our total emissions.”
And about a quarter of total greenhouse gas emissions from the food industry can be attributed specifically to beef production, which requires 28 times more land, six times more fertilizer, and 11 times more water than other animal products like chicken, dairy, or eggs. By one frequently cited estimate, replacing beef on your plate with chicken could cut your dietary carbon footprint in half.
That’s not insignificant: To become carbon neutral by 2050, every person on the planet would need to limit their emissions to an annual 2 tons of carbon dioxide equivalents or less, Germany’s Deutsche Welle reports; meat consumption alone “accounts for [a] … staggering 4.1 carbon dioxide equivalents in North America.” Beef is so significantly worse than other protein sources that if just 20 percent of the Americans who currently eat beef switched to anything else, it would “reduce the overall carbon footprint of all U.S. diets by 9.6 percent,” according to one study. Put another way, “people eating the same number of calories and the same number of grams of protein can have a vastly different impact,” Eshel told me. “Much more so than choices of car, much more — like tenfold or more.”
Sure, we could all just become vegetarians and vegans, but judging by how many people I’ve offended by confirming no, I’ve never had bacon, that reality is a long way off. And according to Eshel, it doesn’t even have to be aspirational: “There is only one thing that I can think of where, each time you avail yourself of it, you’re doing a significant damage to your overall diet: that would be beef,” he said. “Everything else is kind of, let’s call it negotiable.”
Eat chicken to save the planet seems like a simple enough sell. But emissions notwithstanding, there’s an ethical problem with this solution.
Standing in my kitchen, visualizing the production chains, something horrible and obvious started to dawn on me. Cows are big. Chickens are small. If we replace beef with poultry, we’re only shifting the barreling, destructive forces of man onto a track aimed straight at an unthinkable number of hens.
“Oh my god,” I blurted to my husband in horror as he was making us dinner. “I think I’ve created the trolley problem, with chickens.”
Because here’s the thing: The meat from one slaughtered cow is roughly the equivalent of meat from something like 100 to 150 chickens. “Globally we slaughter 320 million cows for meat each year,” Wired U.K. has written. “If we sourced all of that meat from chicken instead, we’d be killing an extra 41 billion animals.” There are some animal activists who are so alarmed by that math that they actually urge eating anything but chicken. As Matt Ball, whose organization One Step for Animals endorses this view, explained to me over email, “The only reason to care about the climate is how it impacts sentient beings. The only ethical stance is to promote choices that lead to less suffering.”
Meanwhile, the World Health Organization anticipates 250,000 additional human deaths due to climate change between 2030 and 2050. Though most people value human life over a chicken’s — arguably, in feeding ourselves, this is what we’re actively doing — 41 billion dead animals is a lot of misery. Industrially raised birds have uniquely ghastly existences, even by factory-farmed animal standards; according to John Webster, a veterinarian and leading authority on livestock welfare, the chicken industry is “the single most severe, systematic example of man’s inhumanity to another sentient animal.”
The “climate vs. animal well-being” tradeoff can be extrapolated out even further. Feedlot cows — an animal you don’t especially want to be — are fed greenhouse gas-curbing diets of grain, and thus produce up to 40 percent less methane than comparatively happy, but belchier, grass-fed cattle. Free-range chickens also have higher emissions than those that live in the hellish, windowless sheds exposed in PETA documentaries. There is no way around it: Climate-friendly omnivorous diets, and even climate-friendly vegetarian diets supplemented with eggs and dairy, often come at the expense of the increased suffering of animals.
Reeling in this existential horror, I presented the conundrum to Princeton University professor and renowned bioethicist Peter Singer, whose 1975 book Animal Liberation was foundational in the legitimizing of animal suffering and is considered a cornerstone of the modern animal welfare movement (a revised edition, Animal Liberation Now, will be out in May). The problem with my question, he pointed out, was the entire premise of an “ethical omnivore,” which — while perhaps not entirely impossible — would be very hard to realistically be, given the pervasiveness of inhumane practices in the meat industry. “It’s hard to find what are good choices, both from a humane point of view, not supporting cruelty to animals, and the climate point of view,” he agreed.
But all was not lost! “One thing that anybody can do, of course, is to reduce the consumption of meat and other animal products,” Singer suggested. That way, “you’re then reducing both your greenhouse gas contributions and your support of intensive farming and animal suffering.”
It’s a method Webster, the veterinarian, proposed to me, too. Due to the astonishing production capabilities of modern poultry farms, where hens are bred to grow at monstrous rates and reach slaughter weight around just 6 weeks old, chicken “has become a junk food ... it’s cheaper than dog food, it is grotesque,” he told me. If we’re going to be taking “food from animals, it’s got to be higher quality, less of it,” Webster went on. “And we’ve got to pay more for it, so we don’t eat so much. Which, of course, is incidentally, or coincidentally, entirely good in terms of animal welfare. It’s a win-win situation for the animals.” Of course, it’s not a win-win for the humans always; if meat becomes a luxury good then it will become predominantly a food for the rich, a problematic outcome in different ways.
Still, Americans actually are eating less beef than they used to, but we are also eating more animals, overall, than ever. The year 2022 set a record for meat consumption, and 2023 is projected to set a new one, due mainly to the increased consumption of chicken by U.S. households. “When additional meat choices are offered,” researcher Richard York discovered in a 2021 study, “that additional variety tends to … increase overall meat consumption,” rather than shift Americans from one kind of protein, like beef, to another.
Is the only truly ethical way to eat, then, to be a full vegan? Even that depends on who you ask. In Planta Sapiens: The New Science of Plant Intelligence, a forthcoming book by Paco Calvo, a professor of philosophy of science and the principal investigator at the Minimal Intelligence Lab at the Universidad de Murcia in Spain, the author makes the case that it’s “very unlikely that plants are not far more aware than we intuitively assume.” And if that’s true, then “we can no longer turn a blind eye to the ethical implications of our interactions with them,” he writes, since, “if an organism has awareness, then our treatment of it has implications for its suffering.”
Absurd as such a line of thinking might seem — Singer, for one, outright dismisses the possibility that plants feel pain in Animal Liberation, and Calvo will be the first to admit the theories in his book have yet to be accepted by the wider philosophical and biological science communities — I’ve actually found it to be one of the most enlightening ways to think about how we should approach food. Speaking with Calvo, he advised me against connecting climate-conscious eating and animal welfare too tightly, lest we “run the risk of feeling safe.” Just because someone is a vegetarian, for example, doesn’t mean they’re not practicing or supporting intensive agriculture and in doing so, unnecessarily stressing living organisms; that person might even be in a worse ethical position than someone living off of free-range, free-roaming animals. “It has to do not with the intrinsic value, or with the organism, per se, but with the suffering being inflicted unnecessarily, regardless of the kingdom of precedence,” Calvo said.
The argument of Planta Sapiens, after all, isn’t that we shouldn’t eat salads anymore, but that all life is deserving of dignity, even when that means humbling ourselves with the recognition that we might not have a monopoly on behavior, intelligence, and awareness. While I believe Singer is right — that it is difficult to minimize suffering as an omnivore within the parameters of the world most of us actually live in, i.e. one full of Costcos and Price Choppers — the important thing is to mitigate harm whenever and however we can. “I mean, it takes a toll, being alive,” Calvo counseled me. “So we’ve got to be realistic to some extent.”
Okay, so maybe I don’t have the moral high ground I thought I did on my hamburger-munching elementary school classmates who are now DIYing candles and chronicling their composting efforts on Instagram. The answer to “What is the best and most realistic diet for most people?” continues to be reflected well in the old Michael Pollanism: “Eat food. Not too much. Mostly plants.”
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Deep Fission says that building small reactors underground is both safer and cheaper. Others have their doubts.
In 1981, two years after the accident at Three Mile Island sent fears over the potential risks of atomic energy skyrocketing, Westinghouse looked into what it would take to build a reactor 2,100 feet underground, insulating its radioactive material in an envelope of dirt. The United States’ leading reactor developer wasn’t responsible for the plant that partially melted down in Pennsylvania, but the company was grappling with new regulations that came as a result of the incident. The concept went nowhere.
More than a decade later, the esteemed nuclear physicist Edward Teller resurfaced the idea in a 1995 paper that once again attracted little actual interest from the industry — that is, until 2006, when Lowell Wood, a physicist at the Lawrence Livermore National Laboratory, proposed building an underground reactor to Bill Gates, who considered but ultimately abandoned the design at his nuclear startup, TerraPower.
Now, at last, one company is working to make buried reactors a reality.
Deep Fission proposes digging boreholes 30 inches in diameter and about a mile deep to house each of its 15-megawatt reactors. And it’s making progress. In August, the Department of Energy selected Deep Fission as one of the 10 companies enrolled in the agency’s new reactor pilot program, meant to help next-generation startups split their first atoms by July. In September, the company announced a $30 million reverse merger deal with a blank check firm to make its stock market debut on the lesser-known exchange OTCQB. Last month, Deep Fission chose an industrial park in a rural stretch of southeastern Kansas as the site of its first power plant.
Based in Berkeley, California, the one-time hub of the West Coast’s fading anti-nuclear movement, the company says its design is meant to save money on above-ground infrastructure by letting geology do the work to add “layers of natural containment” to “enhance safety.” By eliminating much of that expensive concrete and steel dome that encases the reactor on the surface, the startup estimates “that our approach removes up to 80% of the construction cost, one of the biggest barriers for nuclear, and enables operation within six months of breaking ground.”
“The primary benefit of placing a reactor a mile deep is cost and speed,” Chloe Frader, Deep Fission’s vice president of strategic affairs, told me. “By using the natural pressure and containment of the Earth, we eliminate the need for the massive, above-ground structures that make traditional nuclear expensive and slow to build.”
“Nuclear power is already the safest energy source in the world. Period,” she said. “Our underground design doesn’t exist because nuclear is unsafe, it exists because we can make something that is already extremely safe even safer, simpler, and more affordable.”
But gaining government recognition, going public, and picking a location for a first power plant may prove the easy part. Convincing others in the industry that its concept is a radical plan to cut construction costs rather than allay the public’s often-outsize fear of a meltdown has turned out to be difficult, to say nothing of what actually building its reactors will entail.
Despite the company’s recent progress, I struggled to find anyone who didn’t have a financial stake in Deep Fission willing to make the case for its buried reactors.
Deep Fission is “solving a problem that doesn't actually exist,” Seth Grae, the chief executive of the nuclear fuel company Lightbridge, told me. In the nearly seven decades since fission started producing commercial electrons on the U.S. grid, no confirmed death has ever come from radiation at a nuclear power station.
“You’re trying to solve a political problem that has literally never hurt anyone in the entire history of our country since this industry started,” he said. “You’re also making your reactors more expensive. In nuclear, as in a lot of other projects, when you build tall or dig deep or lift big and heavy, those steps make the projects much more expensive.”
Frader told me that subterranean rock structures would serve “as natural containment, which also enhances safety.” That’s true to some extent. Making use of existing formations “could simplify surface infrastructure and streamline construction,” Leslie Dewan, a nuclear engineer who previously led a next-generation small modular reactor startup, told IEEE Spectrum.
If everything pans out, that could justify Deep Fission’s estimate that its levelized cost of electricity — not the most dependable metric, but one frequently used by solar and wind advocates — would be between $50 and $70 per megawatt-hour, lower than other SMR developers’ projections. But that’s only if a lot of things go right.
“A design that relies on the surrounding geology for safety and containment needs to demonstrate a deep understanding of subsurface behavior, including the stability of the rock formations, groundwater movement, heat transfer, and long-term site stability,” Dewan said. “There are also operational considerations around monitoring, access, and decommissioning. But none of these are necessarily showstoppers: They’re all areas that can be addressed through rigorous engineering and thoughtful planning.”
As anyone in the geothermal industry can tell you, digging a borehole costs a lot of money. Drilling equipment comes at a high price. Underground geology complicates a route going down one mile straight. And not every hole that’s started ends up panning out, meaning the process must be repeated over and over again.
For Deep Fission, drilling lots of holes is part of the process. Given the size of its reactor, to reach a gigawatt — the output of one of Westinghouse’s flagship AP1000s, the only new type of commercial reactor successfully built from scratch in the U.S. this century — Deep Fission would need to build 67 of its own microreactors. That’s a lot of digging, considering that the diameters of the company’s boreholes are on average nearly three times wider than those drilled for harvesting natural gas or geothermal.
The company isn’t just distinguished by its unique approach. Deep Fission has a sister company, Deep Isolation, that proposes burying spent nuclear fuel in boreholes. In April, the two startups officially partnered in a deal that “enables Deep Fission to offer an end-to-end solution that includes both energy generation and long-term waste management.”
In theory, that combination could offer the company a greater social license among environmental skeptics who take issue with the waste generated from a nuclear plant.
In 1982, Congress passed a landmark law making the federal government responsible for the disposal of all spent fuel and high-level radioactive waste in the country. The plan centered on building a giant repository to permanently entomb the material where it could remain undisturbed for thousands of years. The law designated Yucca Mountain, a rural site in southwestern Nevada near the California border, as the exclusive location for the debut repository.
Construction took years to start. After initial work got underway during the Bush administration, Obama took office and promptly slashed all funding for the effort, which was opposed by then-Senate Majority Leader Harry Reid of Nevada; the nonpartisan Government Accountability Office clocked the move as a purely political decision. Regardless of the motivation, the cancellation threw the U.S. waste disposal strategy into limbo because the law requires the federal government to complete Yucca Mountain before moving on to other potential storage sites. Until that law changes, the U.S. effort to find a permanent solution to nuclear waste remains in limbo, with virtually all the spent fuel accumulated over the years kept in intermediate storage vessels on site at power plants.
Finland finished work on the world’s first such repository in 2024. Sweden and Canada are considering similar facilities. But in the U.S., the industry is moving beyond seeing its spent fuel as waste, as more companies look to start up a recycling industry akin to those in Russia, Japan, and France to reprocess old uranium into new pellets for new reactors. President Donald Trump has backed the effort. The energy still stored in nuclear waste just in this country is sufficient to power the U.S. for more than a century.
Even if Americans want an answer to the nuclear waste problem, there isn’t much evidence to suggest they want to see the material stored near their homes. New Mexico, for example, passed a law barring construction of an intermediate storage site in 2023. Texas attempted to do the same, but the Supreme Court found the state’s legislation to be in violation of the federal jurisdiction over waste.
While Deep Fission’s reactors would be “so far removed from the biosphere” that the company seems to think the NRC will just “hand out licenses and the public won’t worry,” said Nick Touran, a veteran engineer whose consultancy, What Is Nuclear, catalogs reactor designs and documents from the industry’s history.
“The assumption that it’ll be easy and cheap to site and license this kind of facility is going to be found to be mistaken,” he told me.
The problem with nuclear power isn’t the technology, Brett Rampal, a nuclear expert at the consultancy Veriten, told me. “Nuclear has not been suffering from a technological issue. The technology works great. People do amazing things with it, from curing cancer to all kinds of almost magical energy production,” he told me. “What we need is business models and deployment models.”
Digging a 30-inch borehole a mile deep would be expensive enough, but Rampal also pointed out that lining those shafts with nuclear-grade steel and equipping them with cables would likely pencil out to a higher price than building an AP1000 — but with one one-hundredth of the power output.
Deep Fission insists that isn’t the case, and that the natural geology “removes the need for complex, costly pressure vessels and large engineered structures” on the surface.
“We still use steel and engineered components where necessary, but the total material requirements are a fraction of those used in a traditional large-scale plant,” Frader said.
Ultimately, burying reactors is about quieting concerns that should be debunked head on, Emmet Penney, a historian of the industry and a senior fellow at the Foundation for American Innovation, a right-leaning think tank that advocates building more reactors in the U.S., told me.
“Investors need to wake up and realize that nuclear is one of the safest power sources on the planet,” Penney said. “Otherwise, goofy companies will continue to snow them with slick slide decks about solving non-issues.”
On energy efficiency rules, Chinese nuclear, and Japan’s first offshore wind
Current conditions: Warm air headed northward up the East Coast is set to collide with cold air headed southward over the Great Lakes and Northeast, bringing snowfall followed by higher temperatures later in the week • A cold front is stirring up a dense fog in northwest India • Unusually frigid Arctic air in Europe is causing temperatures across northwest Africa to plunge to double-digit degrees below seasonal norms, with Algiers at just over 50 degrees Fahrenheit this week.

Oil prices largely fell throughout 2025, capping off December at their lowest level all year. Spot market prices for Brent crude, the leading global benchmark for oil, dropped to $63 per barrel last month. The reason, according to the latest analysis of the full year by the Energy Information Administration, is oversupply in the market. China’s push to fill its storage tanks kept prices from declining further. Israel’s June 13 strikes on Iran and attacks on oil infrastructure between Russia and Ukraine briefly raised prices throughout the year. But the year-end average price still came in at $69 per barrel, the lowest since 2020, even when adjusted for inflation.

The price drop bodes poorly for reviving Venezuela’s oil industry in the wake of the U.S. raid on Caracas and arrest of the South American country’s President Nicolás Maduro. At such low levels, investments in new infrastructure are difficult to justify. “This is a moment where there’s oversupply,” oil analyst Rory Johnston told my colleague Matthew Zeitlin yesterday. “Prices are down. It’s not the moment that you’re like, I’m going to go on a lark and invest in Venezuela.”
The Energy Department granted a Texas company known for recycling defunct tools from oil and gas drilling an $11.5 million grant to fund an expansion of its existing facility in a rural county between San Antonio and Dallas. The company, Amermin, said the funding will allow it to increase its output of tungsten carbide by 300%, “reducing our reliance on foreign nations like China, which produces 83%” of the world’s supply of the metal used in all kinds of defense, energy, and hardware applications. “Our country cannot afford to rely on our adversaries for the resources that power our energy industry,” Representative August Pfluger, a Texas Republican, said in a statement. “This investment strengthens our district’s role in American energy leadership while providing good paying jobs to Texas families.”
That wasn’t the agency’s only big funding announcement. The Energy Department gave out $2.7 billion in contracts for enriched uranium, with $900 million each to Maryland-based Centrus Energy, the French producer Orano, and the California-headquartered General Matter. “President Trump is catalyzing a resurgence in the nation’s nuclear energy sector to strengthen American security and prosperity,” Secretary of Energy Chris Wright said in a press release. “Today’s awards show that this Administration is committed to restoring a secure domestic nuclear fuel supply chain capable of producing the nuclear fuels needed to power the reactors of today and the advanced reactors of tomorrow.”
Low-income households in the United States pay roughly 30% more for energy per square foot than households who haven’t faced trouble paying for electricity and heat in the past, federal data shows. Part of the problem is that the national efficiency standards for one of the most affordable types of housing in the nation, manufactured homes, haven’t been updated since 1994. Congress finally passed a law in 2007 directing the Department of Energy to raise standards for insulation, and in 2022, the Biden administration proposed new rules to increase insulation and reduce air leaks. But the regulations had yet to take effect when President Donald Trump returned to office last year. Now the House of Representatives is prepared to vote on legislation to nullify the rules outright, preserving the standards set more than three decades ago. The House Committee on Rules is set to vote on advancing the bill as early as Tuesday night, with a full floor vote likely later in the week. “You’re just locking in higher bills for years to come if you give manufacturers this green light to build the homes with minimal insulation,” Mark Kresowik, senior policy director of the American Council for an Energy-Efficient Economy, told me.
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The newest reactor at the Zhangzhou nuclear station in Fujian Province has officially started up commercial operation as China’s buildout of new atomic power infrastructure picks up pace this year. The 1,136-megawatt Hualong One represents China’s leading indigenous reactor design. Where once Beijing preferred the top U.S. technology for large-scale reactors, the Westinghouse AP1000, the Hualong One’s entirely domestic supply chain and design that borrows from the American standard has made China’s own model the new leader.
In a sign of just how many reactors China is building — at least 35 underway nationwide, as I noted in yesterday’s newsletter — the country started construction on two more the same week the latest Hualong One came online. World Nuclear News reported that first concrete has been poured for a pair of CAP1000 reactors, the official Chinese version of the Westinghouse AP1000, at two separate plants in southern China.
Back in October, when Japan elected Sanae Takaichi as its first female prime minister, I told you about how the arch-conservative leader of the Liberal Democratic Party planned to refocus the country’s energy plans on reviving the nuclear industry. But don’t count out offshore wind. Unlike Europe’s North Sea or the American East Coast, the sharp continental drop in Japan’s ocean makes rooting giant turbines to the sea floor impossible along much of its shoreline. But the Goto Floating Wind Farm — employing floating technology under consideration on the U.S. West Coast, too — announced the start of commercial operations this week, pumping nearly 17 megawatts of power onto the Japanese grid. Japanese officials last year raised the country’s goal for installed capacity of offshore wind to 10 gigawatts by 2030 and 45 gigawatts by 2040, Power magazine noted, so the industry still has a long way to go.
Beavers may be the trick to heal nature’s burn scars after a wildfire. A team of scientists at the U.S. Forest Service and Colorado State University are building fake beaver dams in scorched areas to study how wetlands created by the dams impact the restoration of the ecosystem and water quality after a blaze. “It’s kind of a brave new world for us with this type of work,” Tim Fegel, a doctoral candidate at Colorado State, who led the research, said in a press release.
Rob talks about the removal of Venezuela’s Nicolás Maduro with Commodity Context’s Rory Johnston.
Over the weekend, the U.S. military entered Venezuela and captured its president, Nicolás Maduro, and his wife. Maduro will now face drug and gun charges in New York, and some members of the Trump administration have described the operation as a law enforcement mission.
President Donald Trump has taken a different tack. He has justified the operation by asserting that America is going to “take over” Venezuela’s oil reserves, even suggesting that oil companies might foot the bill for the broader occupation and rebuilding effort. Trump officials have told oil companies that the U.S. might not help them recover lost assets unless they fund the American effort now, according to Politico.
Such a move seems openly imperialistic, ill-advised, and unethical — to say the least. But is it even possible? On this week’s episode of Shift Key, Rob talks to Rory Johnston, a Toronto-based oil markets analyst and the founder of Commodity Context. They discuss the current status of the Venezuelan oil industry, what a rebuilding effort would cost, and whether a reopened Venezuelan oil industry could change U.S. energy politics — or even, as some fear, bring about a new age of cheap fossil fuels.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is off this week.
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Here is an excerpt from our conversation:
Robinson Meyer: First of all, does Venezuela have the world’s largest hydrocarbon reserves — like, proven hydrocarbon reserves? And number two, let’s say that Trump has made some backdoor deal with the existing regime, that these existing issues are ironed ou to actually use those reserves. What kind of investment are we talking about on that end?
Rory Johnston: The mucky answer to this largest reserve question is, there’s lots of debate. I will say there’s a reasonable claim that at one point Venezuela — Venezuela has a lot of oil. Let’s just say it that way: Venezuela has a lot of oil, particularly the Orinoco Belt, which, again, similar to the oil sands we’re talking about —
Meyer: This is the Orinoco flow. We’re going to call this the Orinoco flow question.
Johnston: Yeah, exactly, that. Similar to the Canadian oil sands, we’re talking about more than a trillion barrels of oil in place, the actual resource in the ground. But then from there you get to this question of what is technically recoverable. Then from there, what is economically recoverable? The explosion in, again, both Venezuelan and Canadian reserve estimates occurred during that massive boom in oil prices in the mid-2000s. And that created the justification for booking those as reserves rather than just resources.
So I think that there is ample — in the same way, like, Russia and the United States don’t actually have super impressive-looking reserves on paper, but they do a lot with them, and I think in actuality that matters a lot more than the amount of technical reserves you have in the ground. Because as we’ve seen, Venezuela hasn’t been able to do much with those reserves.
So in order to, how to actually get that operating, this is where we get back to the — we’re talking tens, hundreds of billions of dollars, and a lot of time. And these companies are not going to do that without seeing a track record of whatever government replaces the current. The current vice president, his acting president — which I should also note, vice president and oil minister, which I think is particularly relevant here — so I think there’s lots that needs to happen. But companies are not going to trip over themselves to expose themselves to this risk. We still don’t know what the future is going to look like for Venezuela.
Mentioned:
The 4 Things Standing Between the U.S. and Venezuela’s Oil
Trump admin sends tough private message to oil companies on Venezuela
Previously on Shift Key: The Trump Policy That Would Be Really Bad for Oil Companies
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.