Jay Bhatty, CEO of NatGasHub.com joins us today to discuss natural gas in the North American market and why it's here to stay. With high current demand in North America and abroad, natural gas is consistent and plentiful with an integral role in energy transformation. Join us as we discuss the demand, infrastructure and technology considerations as natural gas shepherds us into the future.
Jay Bhatty, CEO of NatGasHub.com joins us today to discuss natural gas in the North American market and why it's here to stay. With high current demand in North America and abroad, natural gas is consistent and plentiful with an integral role in energy transformation. Join us as we discuss the demand, infrastructure and technology considerations as natural gas shepherds us into the future.
chrissass
With me is Jay Bhatty. Jay, Welcome to the program.
05:00.36
Jay Bhatty
Thanks Chris thanks for um, having me in the program I recently saw that you guys completed a ah hundred episodes and just looking at some of the previous guests on your podcast I was flattered. So thank you for having me here.
05:11.15
chrissass
Well, we are absolutely happy to have you here. It's been a pleasure I know I was hanging out with you in Houston just about a week ago and thought it would just be an amazing thing for you to share some of the conversations we've been having with our audience but before we go there. Um, I know who you are but I'm going to guess my audience doesn't really know who you are so let's start by a little bit who you are professionally what company you you're a part of so.
05:33.69
Jay Bhatty
Sure, yeah, yeah, I'm the Ceo and founder of Natgashub.com we are a software company based right here in Houston and just from ah my background you know I've been in the energy industry in Houston. Ah, for a long time I started my career at Enron um, and then ah moved around a little bit and pretty much stayed in natural gas and that's kind of my been my passion. Um and after that worked at.
06:04.11
Jay Bhatty
Um, jp Morgan I was a gas scheduler and then moved on into gas trading and then I was also managing a lot of the Gulf Coast assets um so really lived and breathed natural gas you know front to back office and that's been kind of my background and the company nat gas hub was really started. By experiencing. You know some of the pain points first hand in the natural gas market and what we built is a multi pipeline dashboard that connects any gas shipper to ah over two hundred different pipelines in the north American market. Um, and the aha moment really came you know my first week on the job at JPMorgan I was tasked with scheduling you know 1520 pipes. Um, and I was ah in this It's a highly deadline or re-entered environment and lot of high pressure or stress and you're supposed to get your nominations in you know. Eleven Thirty am was a nomination deadline at the time and it kind of dawned upon me like this is kind of crazy like you have so many different spreadsheets and almost the idea that came in my head is you know it's got to be an Expedia type software that kind of you know when you go shopping for hotels or an airline. You just go to one website. Instead of hundred different pipeline websites out there. So. That's really how the software was born.
07:24.38
chrissass
So you started a company to basically be the Expedia of gas nomination and scheduling. Perhaps if if that's an analogy so it's an it's ah, a tool that you can use to do this to make things like the spreadsheets and things go away. Um, there's been a lot of news about gas in the. About gas recently right? It makes it makes the newspapers. It makes the evening news here in Europe but it's been not such a good year for gas. Everyone's kind of saying well you know because of Germany's dependency and Russia for gas and things like that the market has changed.
07:50.18
Jay Bhatty
Um.
07:57.57
chrissass
What's the US market like for gas and aren't renewables kind of going to displace it. So.
08:02.94
Jay Bhatty
Yeah, yeah, sure. Um, so um, ah up until um, you know the end of last year um there was really this idea that you know there's enough gas out there shale gas production everybody knew about it and when you're swimming in a commodity. It's kind of hard to see you know how important it is. But then as soon as the war started in Ukraine a lot of things changed and um, you know people started greenlighting anything related to natural gas prior to that there was um, you know apprehension. Oh it's a fossil fuel. Do I really want to invest in the fossil fuel going into the future. Um, but if you kind of think of um. Scalable fossil fuels and the energy fuels out there. You know there's really ah coal gas nuclear um that are kind of the 3 primary fuels that can be scaled up to produce electricity. Um, and if the share of coal has to go down. Um, and there's not much appetite for nuclear. The share of natural gas in the short term has to go up to account for it. Yeah sure there'll be ah wind and solar at some point in the future but natural gas is also a very good complement to those fuels because you know the intermittency of those fuels. Um, so. You know I strongly believe and a lot of people in our industry already know this. But even outside the industry. It's starting to dawn upon the people that natural gas at least in our lifetime the share of that in the market is actually going to go up before it goes down and I'm talking the next.
09:19.83
chrissass
Now does that go up with carbon capture. So do you anticipate that they continue to use natural gas but put carbon capture on the turbines or what are you expecting? so.
09:31.10
Jay Bhatty
Yeah, yeah, ah, that will be a big component carbon capture whether it's hydrogen blending of natural gas um renewable natural gas at the end. It's natural gas molecules and they're the ones that are going to be sourced from in in a variety of ways how they're produced and how they're sourced ah will change. Um, and the market will look you know a lot different in the near future. But just the share of natural gas with there being no appetite. Not much appetite for nuclear on the political front and even on the cost ah from a cost perspective nuclear is very expensive. Um. And um, so yeah from a physics a pure physics perspective. You know it's almost hard to see how natural gas is not going to be the fuel ah to help us transition and you know we talk about this energy transition. Um, and you know some people mistake it. It's not a switch. You know you can't just say that from today to tomorrow. It's really a transition and it's going to take a few decades to change it on a scale. Not the size of North America um so
10:29.66
chrissass
But is that not just a north American bias because we have about 20 years of natural gas. Um, we have reserves that where we're energy, independent and natural gas from what I understand right? So is that a north American perspective or a global perspective.
10:43.39
Jay Bhatty
Yeah, and for the longest time it was just north American perspective because um, you know the traders in the natural gas market. All this assumed. Um, until a few years ago that the us natural gas market is kind of like an island um, and every molecule can be accounted for. Ah, but that changed a lot in the last couple of years now the entire world is hungry for us molecules. Um, and you know there's a couple of reasons for that you know if you want the cheapest price ah for a good you go to China to manufacture it. But what's happening now with natural gas is the us is a very political stable country. So a lot of the Europeans they would rather go to a country like the Us to source a natural gas. That's not a dictatorship the laws. You know it's a country of laws and it's predictable in terms of you know what? the risks are um and then the price of natural gas. You know the big determinant. The us is the cheapest source of natural gas in the market today. Um, so both those factors are going to make um a lot of buyers hungry in the world hungry for Us molecules. Um, and so that really makes ah the us natural gas market a prime ah for you know, be able to supply l and g to the global market. Um, so I really feel like the. North American natural gas market is sort of on this cusp of you know the golden age. It's entering the golden age of natural gas because not only is natural gas um fuel for electricity. But it's used in fertilizer for food production.
12:08.37
Jay Bhatty
Um, and a commodity as critical as that and for us to have so much of it and for the Us and the rest of the world to be so short natural gas. It really puts the North American Natural Gas market in a very good position.
12:18.91
chrissass
So the market's good, but we just had the inflation reduction act pass and really that was billions of dollars towards renewables and I don't know if natural gas qualifies as one of those.
12:36.95
Jay Bhatty
Yeah, yeah, sure, Um, and just to be clear. You know I'm you know obviously biased towards natural gas but in no means am I Um, you know in full credit to the environmentalists. Yeah, we do need to have solar and we do need to have wind. Um and the inflation reduction ad has a lot of investment dollars that are allocated. Ah, to those commodities and in the future. Yeah, we will need those but um, even in the world. Let's say that um all of nuclear goes down to zero all of coal goes down to zero the renewables by themselves are not going to be able to power the grid. Um, unless you have massive battery scale storage. Um. And you're able to store all that electricity. Ah the renewables are always going to need something like natural gas that can ramp up and ramp down quickly. Um, so that's just um, you know unless somebody creates a magic fuel in the future that you know can help wind and solar run all the time every time. Um, I Just don't see from a science perspective that there's anything else that could replace natural gas.
13:36.12
chrissass
And then you mentioned your company you were helping with nominations. You talked about the different pipes coming around. How is the infrastructure for gas and how is that developing these days is there's still a resource going into it or's all the money going into renewables these days.
13:52.50
Jay Bhatty
Um, yeah, that is actually a very unfortunate scenario that there's almost no money being spent. There's a lot of cash sitting on the side-lines that want to invest in new pipelines. Um, and that's almost not happening just from a political perspective and from a permitting perspective natural gas are actually being cancelled and no new projects are taking off. Um and so um and that kind of leads into the scenario. How is the market going to change in the next few years what's going to happen. Um, so you know at least I strongly believe that um. California or new England you know they're going to have um a Germany moment in the next few years and I don't know exactly when that might be um and the reason I say that you know obviously I don't want them to go through this scenario where there's a shortage or scarcity of energy in any of those areas. Ah, but just you know from ah from a physics perspective. You know there's a finite set of wires and pipelines. Um, let's say in New England um and what they're doing is they're replicating the exact playbook that Germany went through Germany scaled down nuclear. They're scaling back up now Germany had scaled down coal. And they're back on coal now um and now Germany is wanting the us natural gas from the Gulf Coast um and the new England is doing exactly that they are ah getting rid of coal assets. They don't want nuclear. They're not allowing new natural gas pipelines and they're adding inter intermittency to their to their grid at the same time.
15:18.62
Jay Bhatty
And so all of these you know if you look at ah from a finite physics perspective you're taking away something and you're not putting backs into the system at some point the system is going to break down. Um, and. Sadly, or unfortunately you know that might be um, the point at which um, you know people realize that you can't just take energy for granted.
15:39.99
chrissass
And I mean I think but Germany's gas price so before the war frankly, there were already concerns about gas in Europe right? that they gas crisis didn't I don't believe start with the Ukraine invasion I think there was already a problem before that. Um. When you say they're going to have a Germany moment. So what? what you're saying is they just won't be able to get through the infrastructure. There is not enough capacity to get the power to California or new England or what? What do you mean The Germany moment is why will it be short.
16:11.87
Jay Bhatty
Yeah, yeah, and by that I mean just from you know, ah a pricing perspective. Not a bottleneck perspective. You know not being able to get the natural gas to the power plants that produce electricity or the natural gas straight into the homes the homes that consume or run on natural gas. Um. And the reason for that is you know you can see it now the waha gas in Texas in some areas it trades at ¢30 whereas in ttf it's trading $30 um, so you know there's this big disparity. You know Europe is sending a very strong price signal to the market and so all the natural gas is headed there now. Um, and that's. Eventually what new England or maybe California is going to have to do is if they want to attract those molecules they're going to have to permit new pipelines or they're going to have to send a very priced signal to have the commodity flow through their existing bottlenecks.
16:59.35
chrissass
So now I think Europe has benefited from a little bit of a slowdown in the economy in other places for competing for gas this winter um is that the same thing taking place in North America as well. So I think the demand from Asia you know, kind of gave a respite to Europe to be able to get some of that gas from North America is that kind of thing taking place in the us market this winter.
17:21.68
Jay Bhatty
Um, yeah, so Europe you know they've actually ah benefited so far people are forecasting a doomsday scenario for Europe by this time. Ah, but Europe really bet on the weather for the month of November and they won and so far you know that's kind of played out in their favor. Um, but the strategy the long-term strategy. Obviously the European strategy is to pray to pray that we don't have a very severe winter and in the long run. That's obviously not a sustainable strategy. Um, and so eventually, um, you know there's going to be a turning point where right now there's a bottleneck you know all these storage that's floating out in the Mediterranean. Waiting to make its way into Europe the reason that happened and the prices crater or came off their highs is because you know as a saying goes high prices cure high prices and so Germany's ah all of Europe sent this really strong high price signal to the rest of the world and all the ships diverted headed there. But there's a bottleneck. Um, they don't have that much l and g processing capacity and soon that's going to you know work. Its way into the system. Um and eventually the prices will come down and so you know we're seeing a little bit of that play out in the us as well. The weather has been mild here. Um, and so you know gas has been making its way into storage. Um, so. You know and that's kind of you know, relieved some of the pressure on the prices.
18:39.44
chrissass
So but as we say that I think there's ah a large storm on the west coast today and in the Us and then Europe is in a cold spell this week so we'll see how the winter goes from here. It has been unseasonably warm like when we were in Texas last week. It was ° but I don't think it's still as warm and in either continent at the moment. But.
18:59.55
Jay Bhatty
Yeah, yeah, exactly and you know I've seen that you know from the gas trading days that first pop you know and gas prices comes and everybody sees. Ah new England is whitewashed and you know people kind of panic and you know it happens every year um so yeah once you know we get into the winter you know for a second week of janfebruary you know that's where we'll really get to see some crystallization in the price.
19:21.15
chrissass
So all right? So we talked a little bit high level but are there other problems in the North American Gas Market are there are there leading indicators that there's bumps in the road ahead.
19:32.59
Jay Bhatty
Yeah, yeah, so um, you know the biggest problem at least I see from a technology perspective in the in the natural gas market. You know we talked about the pricing a little bit of the supply and demand but from a technology perspective. We know what's going on is um. Um, a lot of the producers they have systems and technology to process these transactions you know where you're ah trading you're buying and selling and you're flowing gas and all those transactions are processing through your etrm um system. Um, and now we have this new source of demand you know earlier for the gas market. The biggest source of demand was power generators. But now it's lngg buyers and they're global lng buyers. So all of these companies are just going to have to run more volume more transactions more number of trades through their existing systems and some of their systems are just not scalable enough. The lng g market might become bigger than the us powered gen market you know, used to be a small sliver the l and g market of the entire north American gas ah demand picture. But now obviously the us lng g market is feeding the entire world in all of Europe. Um, and so for all of these companies. You know the bp chevron even mid-size every company that is out there selling or trading natural gas is going to need the software and the scalability to run more volume more gas more transactions through their systems.
20:52.27
Jay Bhatty
Um, and so that's kind of what we're seeing now is people are starting to upgrade their technology and also in the future. The market is always moving faster than you know where the gas technology is today and just to give an example you know now we're going to have renewable natural gas and obviously a lot of the systems out there can't handle that. Ah, very specifically or can't isolate that and so that's one of the questions we get asked. A lot is how do I segregate my shale molecules from my renewable molecules. Um, and so you know software is going to have to be built to do some of that so that's where I see is um.
21:28.21
Jay Bhatty
The next challenge for the gas market would be on the technology side.
21:32.12
chrissass
So on the technology for the volume. Um, but I think one of the problems and excuse my ignorance with that I understand from natural gas is.. There's a lot of leakage as well along the way and that's part of the environmental impact is that a true statement that some somewhere along the way you have some loss is that technology changing or is it. You know or we just can put more volume and have more loss. What do you see happening there.
21:54.53
Jay Bhatty
Yeah, yeah, we are ah the companies you know they're starting to certify their production and they're also starting to monitor the methane leaks. So for the Biden administration you know they've made it pretty punitive for a lot of companies to have methane leaks out there and so people are installing sensors. They're making more leak proof technology. There's software out there that ah can track ah leakage and flaring. Um, and so a lot of companies are starting to use that software. Um, and the us is really on the cutting edge when it comes to software development for these kind of things. Um, so yeah, those technologies are already in the market and being used today.
22:30.18
chrissass
And then does this mean with ah the increased demand I've had friends that you know had bitcoin mining operations that would just go Chase you know the cheap gas right? You'd go somewhere where they're just going to burn the gas off anyway and they'd power generators and do you run a data center for lack of a better term do those opportunities go away or have they already gone away then that that cheap. Cheap power and.
22:49.72
Jay Bhatty
Um, no I think um, ah you know the supply of gas is there in the ground right? You know we may not have built new storage in the Us and recently we haven't been adding storage at as fast a clip as we did and you know two decades ago. Ah, but. The gas on the ground is kind of like Pseudo storage or virtual storage. Um, and so as long as people know we have that commodity. Ah, you know we just see the crypto market as just another user of natural gas. You know so you have the traditional power generators. Um, you know that's a traditional user.. The lng Market is a traditional user and the future there could be ah, an emerging crypto market that ah becomes a big component of buying natural gas.
23:31.28
chrissass
All right? So you've talked about the volumes going up you mentioned software you mentioned the complexity of having green molecules mixed In. Um, so where are we on this journey then so your company's doing different things. You're fairly. Close to it Everything in natural gas is taking place How is the general health of the industry then.
23:54.18
Jay Bhatty
Yeah, so um, you know pipelines are out there talking about how they can accommodate some of these renewable sources of gas into their existing infrastructure without having to invest you know, massive dollars pipelines obviously have a limited budget and. Um, and so you know there are some creative solutions out there that are kind of being put introduced to the market now. So for example, Tennessee pipeline there started. You know they've created they applied to the Ferc they got approved for a renewable pool of natural gas that can be traded and transported on the pipeline. And so you can have 1 nomination on Tennessee pipeline for your traditional shale molecules and you can trade this renewable gas on Tennessee pipeline and have nominations for that that is on a separate contract and so that's kind of a way to separate packages of gas that are traveling on the same pipeline once they are inside the pipeline. The gasket molecules get commingled. Ah, but before you put them on into one end of the pipeline and when you take him out on the other side of the pipeline from a tracking perspective. You can track these 2 packages that this one went to this counterparty and the gas on that contract went to that counterparty. Um, so that kind of gives us ah a roadmap for implementing. And incorporating these renewable molecules into our existing framework.
25:08.15
chrissass
Are they getting a premium for their renewable molecule. So is if I'm ordering. You know if I want my company to be green on paper and I want to show that I did it and even though they're blended in the pipeline. Um, you know the 2 questions are does it cost more and is there accountability that. That they didn't oversell the green molecules like how do I know that that yeah that the supply equalled. You know what was bought.
25:31.84
Jay Bhatty
Yeah, yeah, there's definitely a premium for that product in the market certain people demand it. Um and you can see it even on your retail electricity provider. You know when you go out and you buy electricity. They might tell you that hey 10 % of your power comes from renewable from wind and solar. And that is you know ¢10 a kilowatt hour versus the traditional sources ¢8 a kilowatt hour and so you know people are already accustomed to being you know, being able to pay a premium to send a certain price signal in the market to show that hey. I'm actually a responsible user and I'm consuming gas from this source versus that source and I'm willing to pay a premium for it.
26:05.93
chrissass
And then how do you make sure that you have how do you track that so you said there's software that's doing that. So how do I verify you know the Providence of my natural gas I suppose.
26:19.70
Jay Bhatty
Yeah, yeah, and that's something we get asked a lot you know in terms of our software solutions. We obviously have software that can track how much gas flowed from here to there every cycle every day and so we also have software that can do the same for some of these packages of natural gas. You can't track it yet on a molecular basis. But you can track it in terms of mnb to use and you can track these packages of gas and it's probably something that you know we can delve into more.. It's going to take more than ah, one podcast to get into some of these details which you know hopefully green cover in and another one in the future.
26:49.65
chrissass
Absolutely we. We could just kind of curious of you know the challenge of doing that right? So because if you're blending it. It would seem that that's if it's not well prepared. It would seem that that could be oversubscribed right? and that would not meet. People's desire all right? So What I've heard so far is that. Gas is here to stay from what you're saying that we're going to need it for some period you see it transitional. Um, you understand that there's an environmental impact environmental impact. But you really, it's a required step along the way it sounded like you said because it spins up easily and up and down that it's good to help the predictability of a grid. Um, and you believe Personally it's one of the best choices out there because Nuclear doesn't spin up and down very quickly right? It's my understanding and a lot of people don't want it in their backyard.
27:38.42
Jay Bhatty
Well, actually nuclear has a very high capacity factor and if there's any threat to natural gas in the future. It would probably be nuclear. So but that you know the issue with nuclear is the is the waste and um, you know and the problems that could happen with the Fukushima type natural disaster that could happen that. And it's really the nimby you know, not in my backyard type mentality that kind of is holding back nuclear and then the high cost. You know it takes billions of dollars the permitting process for a new nuclear plant could take 1015 years but as far as um, being able to supplement baseload nuclear really is probably the. Ah, better option than even natural gas.
28:13.99
chrissass
All right? So you talked about the permitting process being hard when was the last natural gas pipeline built in North America okay
28:24.76
Jay Bhatty
Yeah, it's um, you know that a full-blown ah interstate natural gas pipeline hasn't been built for you know, quite some time and in the us I mean the Keystone was the last one that got cancelled. Um, and so after that there really hasn't been that there've been small. Ah you know Mountain Valley pipelines smaller pipelines um that can ah transport gas. But even those have kind of been held back and so you mentioned the permitting process you know so that's another big challenge. Um. Just to build any kind of permitting for a new pipeline or any new try building anything new in the us you know the permitting process for anything takes so long if you look at the iea website. Ah you know to permit something new could take anywhere according to their estimate is 12 years um and that's not accounting for the litigation that comes along with it. Um, so um, building anything new. Ah I think is going to be very difficult in the us we're going to unfortunately have to do with our existing infrastructure and so the way to do about it go around. It is um. To retrofit the existing pipeline infrastructure to be able to accommodate hydrogen or ah.
29:29.26
chrissass
Well, that's what I was going to say but aren't you going to compete with Ammonia and Hydrogen different molecules right? So what I would put my crystal ball and I just total winging it here is that at some point there's going be competition for those pipelines to have them meet other gas. So What you're telling me in this interview. Is that you believe that there's going to be demand continuing to grow for natural gas which okay, um, we have inability or desire to build new infrastructure to grow and at the same time we both agree that there's going to be another molecule fighting for those same resources down the road. So that seems like.
30:08.67
Jay Bhatty
Yeah, yeah, so that definitely is a problem for some people in the market if Hydrogen displaces natural gas certainly not for the pipelines. It's more for the natural gas producers that might become extinct in the future whenever that happens. But there's a few things that are kind of.
30:08.87
chrissass
Ah, problem and.
30:26.15
Jay Bhatty
You know that scenario is going to take a long time to play out one is you know in 2008 when I was graduating from my Mba program I thought the age of hydrogen is here you know and so it took a long time and we're still you know, still in the very early phases of hydrogen. Secondly you know to replace hydrogen with natural gas hydrogen is a much lighter. Ah, escapable commodity and to be able to proof airproof your pipelines to be able to carry hydrogen and it's also a much less dense commodity. So in terms of you know, being carbon dense natural gas is much superior to hydrogen now you could compress hydrogen more and make it more dense. But that means. Retrofitting your existing pipeline infrastructure. So let's say we you know overcome that as well. We're certainly not anywhere close to it. Pipelines haven't even started looking into this. They're still in the early phases of studying whether hydrogen can be introduced and some pipelines have tried it. Ah, but then the other ah big question is how are you going to produce all this hydrogen. You know. Is it going to come from natural gas. Ah you know what? they're calling blue hydrogen burning natural gas or is it going to be green hydrogen electrolysis. Well if it's going to be electrolysis and it's just you know the infrastructure for that isn't there yet, you know you can drill gas out of the ground. But for hydrogen you're going to have to make something scalable. To support the size of a $19000000000000 us economy to be able to feed them the entire economy off of hydrogen you know where are you going to source all these hydrogen molecules from um so there's still a lot of scientific challenges that we have yet to overcome and.
31:58.20
Jay Bhatty
In the absence of that you know I don't think hydrogen anytime soon is going to threaten natural gas at the you know I see it maybe ten fifteen percent of hydrogen blending that happens with natural gas. But even that is at least 10 years away
32:13.19
chrissass
Yeah I mean I think with the hydrogen and we had a guest on recently from ge and they talked about um, pretty successful tests where they were blending hydrogen and natural gas for the turbines. Um, and I think they'd gotten like a 40% they were. It was pretty sustainable. It was pretty. Significant from what for the trial ran earlier this year which was pretty interesting.
32:31.76
Jay Bhatty
Yeah, yeah, yeah, sure So The turbines. Ah, you know? yeah Ge has built those and um, that's on the on the side where they combust gas right on the consumption Side. We're on the production side for Hydrogen You know we still to see mass scale production How we're going to go about it. And just for you and me as technologists you know whether it's gas flowing through a commodity or hydrogen flowing through a commodity to the software. It really doesn't Matter. You know our software is really can be adapted and is ripe for disruption regardless of what commodity is flowing through the pipeline.
33:03.28
chrissass
So you mentioned the problem statement when you started your company and you've been in business seven eight years if I recall it's been. It's been a little bit of time. Um, how manual is gas trading today.
33:16.46
Jay Bhatty
Um, yeah, gas ah trading has become electronic It's not as manual as it used to be you know from those days of the ah the trading pits at the nimex they used to be open outcry and a lot of people in there. Um, and they will you know become electronic and that's how ice intercontinental exchange has become so big is. Ah, you know who would have thought um ice which was started out of enron you know they bought the leftover assets of andron and then ice actually bought the New York Stock Exchange so a commodity exchange bought the biggest equity exchange in the world and now ice has become so big. It's basically a software company. Um. And so a lot of technology and innovation has happened on the trading side I remember as a gas trader I used to have this big physical turret box on my desk and it had knobs and it was this clunky thing and now there's virtual turrets. You know people you don't even need those anymore. Ah, but unfortunately on the scheduling side there just has not been as much innovation. Um and scheduling is just 1 step downstream of trading and also on the settlement side. You know there've been um, companies that have tried to automate um streamline the settlements process. Um, and there's just. Haven't been enough dollars invested or any good results on that side and so um, it's really as we're going to flow more volume through this. Ah you know through this engine that companies have which is their trading engine the scheduling and the settlements are going to be bottlenecks in the future.
34:42.82
chrissass
Well I Hope the settlements aren't because that's the startup that that we've done and so I'm hoping from Fideta's point of view that we solve that but normally I don't talk about my day job here. But I can't let you say that there's no effort going on there I.
34:44.58
Jay Bhatty
And so you really need.
34:58.24
Jay Bhatty
Oh yeah, yeah, absolutely and you know that's what I'm talking about is those are the kind of investments we need in these in these parts of our daily processes to automate it. You know and ah you know people who choose to do them manually. Ah, you know it's kind of like either. You're on the right side of technology or you're not and if you choose to not be on the right side of technology. The corporate landscape is littered with companies that um, you know, no longer exist because they didn't adopt the right technology.
35:24.42
chrissass
So why has it taken so long for technology to get throughout the entire the entire process right? So you know you said trading. Okay that handled ice and whatever other reasons it's gotten there pretty quickly so they had software experience there. Ah, scheduling and in each of those steps. Why is it? yeah that we're in a pretty progressive automated world. The us has got a lot of technology a lot of dollars I mean you know we're in Houston there's money going into tech all the time in Houston why hasn't this happened yet. So.
35:54.33
Jay Bhatty
Ah, sure so one of the reasons is you know scheduling is typically viewed as a cost center. Um, and trading is a revenue generator and so a lot of the decision-making happens on the trading front and scheduling is kind of relegated as this task. Ah, really, you know if you think about um, going and filling up your gas at the gas station. You know it's not an ah experience that I want to have or I want to do. But it's a necessity I have to do it and so scheduling is kind of like that at most companies. Um, you know if they didn't have to deal with scheduling. They'd be much better off and their lives would be a lot easier. But unfortunately it is a very necessary component. Anybody who's in the national gas market. Even if you're a bank. You know you have to do scheduling and that has to be done manually and so it being a traditional cost center has been a big deterrent to people investing in this area and but there's no reason why you couldn't turn. Settlements or scheduling from a cost center to a revenue generating unit by automating it and then freeing up the time for all these people to focus on more revenue generating opportunities in the market. Um, and so people who are using the software. There are a lot of tech savvy companies out there and I've been actually surprised. There are some utilities and even pipelines. That are on the cutting edge of this technology side. They've kind of seen the benefits. You know, um, there are you know people who use our software they is to hand type. You know a couple of hundred noms a day and now they're submitting thousands of noms automatically without hand typing um and so they're seeing the benefits of this technology come into the market and they're really seeing it um, as a differentiator.
37:27.13
Jay Bhatty
And so much to the extent that um, you know they don't want me saying in the market that hey we use this software just because they seed as a competitive advantage.
37:34.49
chrissass
Well I think we've already talked about this. But I think we'll do some special episodes you and I to get into the technology and we'll focus on that going into the future I think this primer kind of gets people there. But as we come up to time the one thing that I'm curious about. And you briefly mentioned you know the lng component the terminals getting completed so the market's changing right? The timing was actually pretty fortuitous for the Us to get some terminals done before the Germany kind of crisis took place. Um, how is that changing so in the past you kind of had a north American market. Gas traders and you had a European market for gas traders. What do you see from your experience with the lng is that is that changing and are we going to see some more. Continuity between trading. Let's say between north American traders and European traders because the commodity is moving this way now.
38:26.89
Jay Bhatty
Yeah, yeah, sure. So um, the good thing going on for the natural gas market um is like the natural gas is really it doesn't have so many different grades as you do in the oil market. You know oil can have many prices and many different grades. You know the entire. Barrel of oil is kind of the soup of chemicals you know, but natural gas from that perspective is actually just a 1 grade commodity and actually pipelines require that your grade. Ah the grade of the natural gas have a certain content a moisture etc. Um and carbon content and that's the only way they'll put it into their network. And so that's the same thing is happening for these international markets and so I see a natural gas market that quickly becomes in the next two 5 10 years an even more tradeable commodity than the oil market and ah gas is obviously cleaner than oil. We know it's cleaner than coal. It has a lower carbon content. And a high calorific content. Um, there could be a time where gas actually overtakes oil in terms of being a globally traded commodity.
39:26.57
chrissass
I would suspect so that that is a hydrocarbon's change that that people would probably choose if you could where you where you could use gas you would over oil I suspect that even people would start using that decision today is my guess so well.
39:41.89
Jay Bhatty
Yeah, yeah, and the thing that stops natural gas is you know coal is something that you know it's a physical product. Um, and you know you could go to Home Depot buy coal load up your truck and take it somewhere you know so it's easily transportable. But for the natural gas market. You know it has to have companies build. Pipelines that are interstate or you know freight containers. You know it's not so easily transportable. Um, but once we get past that the market's going to figure out all these l and g ships that are floating outside Spain ah eventually the market's going to figure out and all that excess is going to work its way out and it's not going to happen again. You know everybody that sent a ship over there. And they're kind of just waiting for it to be offloaded are going to realize before they do that the next time that they're going to have a contract in place in order to be able to offload so all these bottlenecks and inefficiencies over the next winter a couple of winters are going to work themselves out. Ah but the demand financial gas is there. You know Europe is not going to go back to Russia. Um, anytime soon and um, there's really no other replacement for it. They're actually going back to coal instead. Um, and they've turned back their permits on for the nuclear power. Um, so the demand is certainly there.
40:51.36
chrissass
Well I think we've covered a lot of ground. Um I think what I heard you say is natural gas is here to stay. It's not going to wear anytime soon. It eventually will but that's a long time between now and eventually. And that there's some improvements in the market that are needed and I think we're going to talk more about those as we go into some future episodes. Um da I want to thank you so much for coming on and sharing more the audience your thoughts today. Thanks for being our guest.
41:11.77
Jay Bhatty
Yeah, sure, no problem at all. Thanks for having me here and now look forward to reconnecting at some point in the future.
41:17.24
chrissass
Thanks to our audience. We hope you've enjoyed this content. It was fun having this conversation I enjoyed finding out more and if you like our show please don't forget to subscribe follow share with our friends and comment in the comments find us on Youtube find us on Facebook add comments and we'll respond we'll talk to you again next week bye