What’s next for BP?

Summary

Marketplace: What’s Next for BP? Released on February 13, 2025

In this episode of Marketplace, host Kai Ryssdal delves into a multifaceted discussion surrounding the current economic landscape, touching on persistent inflation, the evolving dynamics of global trade, the rise of digital payment networks, the influence of financial influencers, the expansion of live concert venues, and the strategic pivot of major oil companies like BP. The episode weaves through these topics, providing listeners with insightful analysis and expert opinions to navigate the complexities of today’s business and economic environment.

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1. Persistent Inflation and Housing Costs

Kai Ryssdal opens the episode by addressing the ongoing challenge of inflation. The latest Consumer Price Index (CPI) report reveals a monthly increase of 0.5% and an annual rise of 3%, indicating that inflation remains stubbornly high. Ryssdal notes that energy, hotels, airfare, and especially shelter costs are significant contributors to this trend.

Key Insights:

• Shelter Costs Breakdown: The Labor Department includes both rents and lodging away from home in its shelter costs metric. While lodging expenses rose in January, rents themselves have shown signs of stabilization.

  “Rents have been really flat. And in some parts of the country, rents have even been falling,” explains Chen Zhao, Head of Economics Research at Redfin, at [02:08].

• Regional Variations in Rent Trends: Bill Adams, Chief Economist at Comerica Bank, highlights that new apartment constructions are easing rent pressures in the Sun Belt due to cheaper and faster homebuilding. Conversely, regions like the Northeast and coastal West face constrained apartment supply, potentially leading to future rent increases.

  “The supply of new apartments could start to dwindle,” warns Ben Ayres, Senior Economist at Nationwide, at [03:00].

• Future Outlook: The episode suggests that if the supply of new housing does not keep pace with demand, housing costs may intensify inflationary pressures.

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2. Turbulence in Global Trade: Tariffs and Their Impact

Syreeta Jackson, President and CEO of the Global Research Institute of International Trade, joins the conversation to discuss the recent escalation in tariffs under the Trump administration. The imposition of a 25% tariff on steel and aluminum, coupled with additional tariffs on Chinese imports and threats against Canada, Mexico, Colombia, and others, has significantly disrupted global trade dynamics.

Key Points:

• Consultant Perspective: Chen Zhao describes the role of a trade consultant amid these changes as navigating a constant storm of regulatory shifts, often with less than 24 hours to respond.

  “We just need to adjust and figure out the best strategy with the resources that are available,” Zhao states at [06:13].

• Economic Consequences: The introduction of higher tariffs inevitably leads to increased costs for businesses, which are often passed on to consumers. Exporters face challenges as retaliatory tariffs from other nations make market expansion more difficult.

  “Prices will go up. The business owner will have to carry those costs,” Zhao remarks at [07:28].

• Long-term Trade Order: Zhao emphasizes the importance of international institutions like the World Trade Organization (WTO) in maintaining global trade stability. Despite the current protectionist trends, there is hope that these institutions can prevent the collapse of the international trade system.

  “There is this international institution that can continue to govern so that trade can continue and be beneficial,” Zhao concludes at [08:42].

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3. The Rise of Digital Payment Networks

The episode shifts focus to the burgeoning use of digital payment platforms, highlighting Zelle's achievement of servicing over a trillion dollars in payments last year—the highest volume for any peer-to-peer (P2P) payment app.

Highlights:

• Adoption Rates: With nearly three-quarters of consumers using mobile payments and over 90% of those under 25 engaging with apps like Zelle, Venmo, and Cash App, digital payments are becoming ubiquitous.

  “We are now partnering with over 2,200 banks across the network,” states Denise Leonhard, Zelle’s General Manager, at [10:49].

• Convenience vs. Security Risks: While P2P apps offer unparalleled convenience, they also present risks such as irreversible transactions and susceptibility to fraud. Lisa Gill from Consumer Reports points out that users bear the responsibility for resolving issues, as the apps themselves offer limited federal oversight.

  “There's a lot of onus on the individual to sort out a problem,” Gill notes at [11:34].

• Regulatory Developments: The Consumer Financial Protection Bureau (CFPB) has extended its oversight to include payment apps, suing several large banks for inadequate fraud protection. However, Zelle disputes these suits, asserting robust safeguards.

  “They provide multiple backstops to avoid mistakes and scams,” Leonhard defends Zelle at [11:50].

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4. Financial Influencers: Empowerment or Misinformation?

Isabella Kwai from The New York Times explores the phenomenon of financial influencers, or "finfluencers," who wield significant sway over public financial behavior through social media.

Discussion Points:

• Diverse Spectrum of Influencers: Finfluencers range from certified financial planners to celebrities partnering with financial products. Their accessibility and ability to simplify complex financial concepts make them popular, especially among underserved demographics.

  “Financial influencers can be really anyone who is online and sharing information about investing or personal finance,” Kwai explains at [13:00].

• Risks of Misinformation: The unregulated nature of social media means that not all finfluencers are qualified, leading to the spread of misleading or harmful advice. Instances of pump-and-dump schemes and the promotion of high-risk assets highlight the dangers.

  “There is potential for misinformation to spread,” Kwai warns at [13:58].

• Regulatory Challenges: Isabella discusses the difficulties regulators face due to jurisdictional issues, where influencers based in different countries complicate enforcement efforts.

  “Jurisdiction makes it difficult for regulators to pursue some people who are perhaps spreading misinformation,” Kwai adds at [15:48].

• Consumer Responsibility: The episode underscores the importance of due diligence when following finfluencers, as regulatory protections remain limited.

  “Caveat emptor on your finances,” Syreeta Jackson advises at [16:34].

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5. Expansion of Live Concert Venues in Mid-Sized Cities

2023 marked a record high for concert ticket sales in North America, prompting promoters to explore growth opportunities in mid-sized American cities. Denise Leonhard from Colorado Public Radio reports on Venue, a Colorado-based company aiming to replicate the success of established venues like the Ford Amphitheater in underserved regions.

Key Insights:

• Economic Impact: New venues are pitched as drivers of millions in economic activity, often receiving tax incentives to support their establishment.

  “These outdoor amphitheaters can bring millions of dollars in economic activity,” explains Denise Leonhard at [23:34].

• Community Challenges: Despite economic benefits, new venues can lead to local resistance due to noise pollution. Residents near Colorado Springs' Ford Amphitheater have protested over decibel levels, prompting Venue to invest $3 million in sound mitigation measures.

  “Venues are expensive to build,” Leonhard notes at [23:39].

• Balancing Act: Venue’s CEO, J.W. Roth, emphasizes the reciprocal benefits—businesses thrive alongside the venue, fostering a symbiotic relationship with the community.

  “They want my business there and they want us there,” Roth states at [25:30].

• Future Prospects: With additional venues under construction in states like Oklahoma and Texas, Venue aims to balance high-end concert experiences with community-friendly operations.

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6. BP’s Strategic Business Reset

As the episode's titular theme, BP's strategic pivot serves as a focal point for discussing how traditional oil and gas companies are adapting to a rapidly changing energy landscape.

Analysis:

• Profit Declines and Strategic Shifts: BP announces a fundamental reset of its business strategy in response to a more than one-third drop in profits in 2024. Contrary to expectations of a shift towards renewables, BP, along with Shell and Equinor, continues to focus on maximizing profitability through traditional oil and gas operations.

  “These companies are trying to make money, and they have been following the political winds,” Justin Ho explains at [19:48].

• Political Influence: The Trump administration's reversal on clean energy incentives and encouragement of oil and gas drilling have altered the strategic calculus for these companies. Christopher Knittle from MIT notes that favorable policies make continued investment in fossil fuels more attractive.

  “That's changed in Washington. The Trump administration is now encouraging more oil and gas drilling,” Ho states at [20:02].

• Market Conditions: High natural gas prices in Europe, driven by geopolitical tensions like the Russian invasion of Ukraine, sustain profitability for oil companies. This enduring demand ensures that companies remain focused on their core competencies in fossil fuel extraction.

  “Natural gas prices in Europe are still high since the Russian invasion of Ukraine,” Ho remarks at [20:30].

• Investment in Renewables: Despite lucrative returns from oil and gas, the transition to renewable energy requires significant policy support and public investment to overcome the inherent learning curves and achieve profitability.

  “It takes a long time for emerging technology to eventually become profitable,” Hugh Daigle from UT Austin points out at [21:04].

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7. Market Movements and Corporate Developments

Towards the episode's conclusion, Ryssdal provides a brief overview of recent market activities and corporate news:

• Stock Market Performance: Dow Industrials fell by 225 points (0.5%), NASDAQ edged up by six points (<0.1%), and the S&P 500 decreased by 16 points (0.3%).

• DoorDash Expansion: DoorDash exceeded Q1 expectations and anticipates increased demand as it incorporates more grocery stores into its delivery network, resulting in a 4% share price increase.

• Chevron Layoffs: Chevron announced plans to lay off up to 20% of its workforce to cut costs by $2-3 billion by the end of 2026, leading to a 1.6% drop in its stock price.

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8. Closing Remarks

The episode wraps up with a reminder of the Federal Reserve's stance on interest rates, reinforced by recent inflation data. Chair Powell emphasized the intention to maintain restrictive policies, signaling no imminent rate cuts. Additionally, Ryssdal promotes the Marketplace newsletter and hints at upcoming content, maintaining engagement with the audience.

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Conclusion

This episode of Marketplace offers a comprehensive exploration of critical economic issues shaping 2025. From the resilience of inflation and the complexities of global trade to the transformative impact of digital payments and the strategic maneuvers of oil giants like BP, Ryssdal ensures listeners are well-informed. Expert interviews and real-world examples enrich the narrative, making complex topics accessible and relevant for a broad audience.

Transcript

[Kai Rysdal]

Programming is supported by Stull Reeves, a leading US Corporate and litigation law firm providing sophisticated business clients high quality legal services with offices in seven states including Minnesota and Washington, D.C. stull Reeves is a nationally recognized leader in project finance and natural resources industries. From deals and disputes to compliance and counseling. Clients turn to Stull Reeves for their most complex business challenges.

[Syreeta Jackson]

[e-mail] all right, I'm just gonna get right to it. Uh oh, that's it. That's the Open From American Public Media. This is Marketplace in Los Angeles. I'm Kai Rysdal. It is Wednesday today, 12th February. Good as always to have you along, everybody. We have heard over the past year or so that inflation's bumpy, that it's sticky, that the last mile, as it were, to the Fed's desired landing at 2% is the hard part. Inflation is, in fact, turning out to be all of those things and maybe a little bit more, too. The January Consumer Price Index came out this morning, up half a percent month to month, 3% on a yearly basis. Not what anybody wants to hear, obviously. And you can pick your favorite villain. Energy, hotels, airfare, they all went up. Shelter has been a persistent source of some of that stickiness. It accounted for nearly a third of that monthly increase in this morning's report. And yes, that does sound bad. But as Marketplace's Justin Ho reports, rent inflation has actually been coming down a bit lately.

[Kai Rysdal]

The Labor Department's definition of shelter costs includes rents, but it also includes what it calls lodging away from home. Just think of that as basically hotels when you go on vacation. That's Chen Zhao, head of economics research at the real estate company Redfin. She says those lodging costs went up in January, but rents have not been increasing so quickly, according to the Labor Department and Redfin's own data. What you'll see is that for the.

[Justin Ho]

Last two, two and a half years, rents have been really flat. And in some parts of the country.

[Kai Rysdal]

Rents have even been falling. There are a lot of newly built apartments that are finally coming online, says Bill Adams, chief economist at Comerica Bank. He says this is happening the most in the Sun Belt, where there's lots of undeveloped land and where home building is cheaper and faster to do. But in other parts of the country, the pipeline of new apartments is still pretty constrained, especially in the Northeast and the coastal West. And there we're likely to see faster rent increases in markets that are adding less supply, where construction is more expensive. The numbers of new apartment construction projects and building permits have been trending lower Chen Zhao at Redfin says some contractors don't want to keep building apartments if rents are stagnant. Meanwhile, they're also facing very high financing.

[Justin Ho]

Costs because interest rates continue to be high.

[Kai Rysdal]

All of that means the supply of new apartments could start to dwindle, says Ben Ayres, senior economist at Nationwide.

[Syreeta Jackson]

You know, a year from now, two years from now, we might be back.

[Kai Rysdal]

In this similar situation where we're talking about constrained housing supply because we're just.

[Syreeta Jackson]

Not building enough to keep up with.

[Kai Rysdal]

The amount of demand in the market. And that means housing costs could start to put more pressure on inflation. I'm Justin Ho for Marketplace Wall street today.

[Syreeta Jackson]

Interestingly, not all that upset by that CPI report. We'll have the details when we do the numbers. It is one short month from today, March 12, that the Trump administration's 25% steel and aluminum tariffs hit. As the president said when he signed the orders on Monday, it's a big deal. What's also a big deal are the additional 10% tariffs the Trump administration has imposed on all Chinese imports and the threats of 25% tariffs on Canada and Mexico and Colombia and various retaliatory tariffs threatened by our allies in response. In short, it has been a month in global trade. Syreeta Jackson is the president and CEO of the Global Research Institute of International Trade, that is a trade consultancy. Syretta, welcome to the program.

[Chen Zhao]

Thank you so much. I'm so glad to be a part of the program.

[Syreeta Jackson]

Explain to me what you're the life of a trade consultant here in February 2025.

[Chen Zhao]

Wow. Well, the best explanation I could say is just kind of being in the middle of a storm, if you will, just really staying on top of what those changes are on a regular basis. I would say 24 hours. Sometimes it's less than 24 hours.

[Syreeta Jackson]

A woman's got to sleep. Right? But, but look, other than what the heck is going on, what are like the top three things that people are asking you?

[Chen Zhao]

Well, the main thing is what does this mean for my product in a particular market? For example, some of my clients are one of the clients. And actually we're scheduled to talk again soon. Toward the end of last year, you know, I had worked with her, I said, hey, why don't you consider having your product or part of it manufactured in Mexico as opposed to China, because we had these tariff already, the tariffs going on, and then we're hearing about more tariffs. So why don't you to shift to Mexico because we have the U.S. mexico, Canada agreement. Well, then There were the concern about, okay, what does this mean for me now that I am looking at Mexico for my production and there still are going to be these tariffs? Another issue that has really come up is pertaining to funding some of these clients. And I just had this conversation yesterday actually is, okay, well, if there's cuts to the funding for the U.S. agency for International Development and that's how I'm able to expand overseas, what does that mean for me to still continue to remain globally integrated in 2025?

[Syreeta Jackson]

Do you have many or any companies saying that because of the present tariffs and whatever tariffs may come, that they are going to reshore their production and bring it back to the United States?

[Chen Zhao]

You know, that is one of the interesting things that I was waiting to hear and as of yet I have not heard that. What has impressed me and these are smaller companies, by the way, what has really been interesting, at least with the companies that I've spoken with. Now maybe someone else may have a different story, but they still are going global or remaining globally integrated and just saying, well, we just need to adjust and figure out the best strategy with the resources that are available.

[Syreeta Jackson]

Right, right. Two more things and then I'll let you get back to work because I know you have client calls that you have to get on. The first one is just very broadly speaking. Clearly now, the United States as a matter of policy is going to be trying to go it alone in global trade. And I realize that's okay, moronic because you can't go it alone in global trade. But we're certainly going to pull back a good deal. What's that going to mean for the American economy?

[Chen Zhao]

For the American economy, the one thing I can definitely say is prices will go up. The business owner will have to carry those costs and then, guess what, some of those costs will be passed on to the consumer. And then if you are an exporter, if that's what you depend on to grow your business and you're exporting to countries and then other countries are retaliating, well, that makes it more difficult for you to grow your business and to enter other markets and provide much needed goods or service in that market, that has an effect both on the businesses and the consumers.

[Syreeta Jackson]

Yeah. And then finally acknowledging that it took decades to build a system of international trade that we have had up until recently. And also granted that there were deep flaws with it and it did some level of damage, but you know, rising tide, all boats. How long do you suppose it takes to rebuild some kind of global trade order? If we have three and a half more years of American isolationism.

[Chen Zhao]

That is a really good question. Well, I something I think needs to be discussed even more is the role of the international institutions, the World Trade.

[Kai Rysdal]

Organization, the wto, which you haven't heard.

[Syreeta Jackson]

Mention of very much at all lately anyway.

[Chen Zhao]

Right, Exactly. Which just I think people miss. Yes, you see sort of this isolationism or protectionism, but there is this whole international institution that sets rules. So for me it's hopefully not that the whole system will crash, but just that we are going through a unique period where we have some of these shifts, but that you have this international body that can continue to govern so that trade can continue and be beneficial in this so called global economy.

[Syreeta Jackson]

Dr. Syrita Jackson, President and CEO of the Global Research Institute of International Trade thank you ma'am for your time. I appreciate it.

[Chen Zhao]

Thank you so much. Thanks for having me.

[Syreeta Jackson]

The digital payment network Zelle said today it serviced a cool trillion dollars in payments last year, what the company claims is the highest volume for a peer to peer payment app ever. According to the Atlanta Fed, almost 3/4 of consumers in this economy use mobile payment of one kind or another. Zelle Venmo the Cash app and more than 90% of consumers under the age of 25 do. As Marketplace's Megan McCarty Carino reports, what started out as a convenient way to pay your friends back for dinner is becoming an ever bigger part of transactions all across the economy.

[Justin Ho]

They're called peer to peer payment apps, but often these days they're being used peer to landlord.

[Kai Rysdal]

This is too convenient. I don't understand why people bother with paper checks anymore.

[Justin Ho]

Zianna Bunch rents out a couple rooms in her house in Morgan Hill, California. Several years ago, at the suggestion of a tenant, she started accepting rent payments through Zelle and she never looked back.

[Kai Rysdal]

Even if they're out of town, they just hit the app and send me.

[Isabella Kwai]

The rent and you get a little Ka Ching noise on your phone.

[Justin Ho]

Zelle general manager Denise Leonhard says the Network moved almost $2 million a minute last year. That's a lot of Ka Chings. We are now partnering with over 2,200 banks across the network and this is enabling their customers to come on and be able to basically go through their daily tasks and be able to pay people that they know and trust. So landlords and babysitters, farmers market vendors, hairstylists, music teachers. But as the dollar amounts grow, so do concerns about mistakes and fraud, says Lisa Gill at Consumer Reports.

[Kai Rysdal]

There's a lot of onus on the individual to Sort out a problem.

[Justin Ho]

The quick, irreversible nature of these apps make it easier to send money to the wrong person or fall prey to scammers, says Gill. And there's little federal oversight.

[Kai Rysdal]

They are not a bank.

[Justin Ho]

Last year, the federal Consumer Financial Protection Bureau extended the agency's oversight to include payment apps. And it sued several large banks for failing to protect Zelle users from fraud. Zell called the suit meritless, saying they provide multiple backstops to avoid mistakes and scams. I'm Meagan McCarty Carino for Marketplace.

[Syreeta Jackson]

Social media is basically everywhere now and you can get inspiration from it. You can use it to just kill some time, or you can use it to decide what you want to do with your money. As Wall street has become more accessible, there's a growing subset of influencers who offer financial advice to their followers. Isabella Kwai wrote about him for the New York Times the other day. Welcome to the program.

[Isabella Kwai]

Thanks for having me, Kai.

[Syreeta Jackson]

Just generally speaking, who are these financial influencers out there?

[Isabella Kwai]

So financial influencers can be really anyone who is online and sharing information about investing or personal finance. Or it could be something from a celebrity who has a big profile and is partnering or working with, you know, financial services or products. And I think that is something that is really interesting about financial influences of influences as we, I'm sorry, finfluencers, Is that what we're calling them?

[Kai Rysdal]

Yes.

[Syreeta Jackson]

Okay.

[Isabella Kwai]

All right. It's very sleek. You know, people have really combined these words. But financial influencers or finfluencers, they really can be anybody. And I think that is part of the concerns around them.

[Syreeta Jackson]

Well, yeah, let's talk more about that cuz we'll get to the possible upsides. But it, you know, on the Internet they don't know you're a dog. Right. Wasn't that, isn't that the famous Far side cartoon? Right. So it could be anybody is the point.

[Isabella Kwai]

Right, right. And one of the issues that makes this field quite difficult is it's so vast. There are people who are giving you information who may not be qualified certified financial planners. And there is potential there for misinformation to spread. In the most serious examples, you have influencers who've been accused of hyping pump and dump schemes or promoting high risk assets. And it can be really hard for your everyday person or your everyday investor to look at all these different influencers online and work out what is going to be handy information for them and what is potentially dangerous information.

[Syreeta Jackson]

Right, so let's get the caveat in here. That if you're going to follow a finfluencer. I can't believe I just said that. You have to do some due diligence and find out who they are. But part of the reason they're so popular is because they're accessible. Right. They probably cater to underserved groups, people who might have been shut out of, you know, this sort of wealth industry, as it were. Right. I mean, there's lots of things that are appealing.

[Isabella Kwai]

Absolutely. And what some financial influencers are good at is putting it in everyday terms that people can understand. And there are influencers out there who I spoke to as part of the story who you know are certified financial planners themselves or certified financial advisors. And they do share information that helps people become more literate when it comes to their finances. But you know, whether they are qualified to do that, you know, experts have recommended. You really should be thinking about this.

[Syreeta Jackson]

Yeah, absolutely. Given that social media is, generally speaking, a vast unregulated wasteland, I imagine there aren't too many regulations protecting people from acting on this bad advice, Right. If you act on questionable advice from a finfluencer, you're kind of on your own, right?

[Isabella Kwai]

Well, not entirely.

[Syreeta Jackson]

All right.

[Isabella Kwai]

One thing, well, one thing that you know, is interesting to explore is, well, what's the responsibility here? And you know, in the U.S. the SEC, for example, has pursued some high profile celebrities for not being honest about whether they were paid to promote an asset or not. But so ultimately, one big challenge in this is jurisdiction. People can be following advice from someone in the US while they're, you know, sitting like myself in London and they, you know, the question being, would this fall under UK jurisdiction? Jurisdiction. And that makes it difficult for regulators to pursue some people who are perhaps spreading misinformation.

[Syreeta Jackson]

Right? Totally. No matter where you are. Caveat emptor on your finances, I'm telling you. Isabella Kwai with the New York Times. Isabella, thanks a lot. Appreciate your time.

[Isabella Kwai]

Thank you so much.

[Syreeta Jackson]

Coming up, we had to cut our evening short as the band was screaming profanities. Let's have some control here, people. First though, let's do the numbers. Dow Industrials down 225 points today, a half percent. 44,368. The NASDAQ ticked up six points. That's less than a tenth percent. 19,649. The S&P 500 slipped 16 points. About 3. 10%. 6051 DoorDash posted first quarter results beat expectations. Company said it expects demand for food delivery services to increase as it adds more grocery stores to the business. Shares up 4% today Chevron announced it's going to lay off up to 20% of its workforce. It's a cost cutting measure. The oil company says it needs to reduce between 2 and $3 billion in costs by the end of 2026. Chevron off 1 and 6 10% you're listening to Marketplace.

[Justin Ho]

This Marketplace podcast is supported by Gusto. Look, payday's awesome.

[Isabella Kwai]

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[Justin Ho]

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[Isabella Kwai]

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[Justin Ho]

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[Syreeta Jackson]

If you want to be savvy about the economy, the Marketplace newsletter is just what you need. Every Friday you'll get explainers and analysis that make sense of everything from the moving markets to grocery prices. No jargon, no hype, just smart takes delivered to your inbox. Sign up [e-mail] subscribe this is Marketplace. I'm Kai Rysdal. Crude oil droop today. Both benchmarks Brent North Sea and West Texas off about 2.5%, low 70s a barrel for each of them, which I mention because one of the stalwarts of big oil is rethinking things. BP Once upon a time, British Petroleum says it's going to start a fundamental reset of its business strategy later this month. Profits were off more than a third in 2024, and while one might think that that reset would involve renewables, not so. And in point of fact, BP has company Shell and the Norwegian producer Equinor are doing pretty much the same thing. Marketplace's Samantha Field has more Just five.

[Justin Ho]

Years ago, oil companies were announcing big investments in renewable energy projects and setting climate goals.

[Syreeta Jackson]

Oil and gas companies are trying to.

[Kai Rysdal]

Make money, and they have been following the political winds.

[Justin Ho]

Severin Borenstein at UC Berkeley's Haas School of Business says, a few years ago, those political wins were pretty clearly blowing.

[Kai Rysdal]

Towards having more emphasis on renewables and potentially restrictions on oil drilling.

[Justin Ho]

That's changed in Washington. The Trump administration is now encouraging more oil and gas drilling and rolling back clean energy incentives. Christopher Knittle at MIT says that's changed the calculus.

[Kai Rysdal]

These companies are publicly traded companies that have a fiduciary responsibility to maximize shareholder wealth and the profitability of oil and.

[Justin Ho]

Natural gas is increasing, and not just because of shifting political winds.

[Kai Rysdal]

Natural gas prices in Europe are still high since the Russian invasion of Ukraine.

[Justin Ho]

And oil prices have stayed pretty high too, he says. So these companies can make good money doing what they're good at, getting oil.

[Kai Rysdal]

And natural gas out of the ground. That's what they've done for the last century. Whenever you pivot to an alternative product, there's a learning curve. You may lose some of your comparative advantage that you enjoy with the old product.

[Justin Ho]

That's why Hugh Daigle at UT Austin says policy and public investment matter.

[Kai Rysdal]

When you look at the history of any kind of emerging technology that has gotten a lot of initial government support early on, it takes a long time.

[Denise Leonhard]

For it eventually to become profitable.

[Justin Ho]

And until it does, for profit, companies don't have much incentive to invest on their own. I'm Samantha fields for Marketplace.

[Syreeta Jackson]

2023 was the all time high for North American concert ticket sales. Beyonce, Taylor Wright. All told, better than six and a half billion dollars for the top 100 grossing tours. Should you be curious, 2024 was good too. And that's one reason that concert promoters are looking to grow the market, expanding into parts of the country that are typically underserved by the big tours. Think mid sized American cities. There's a company in Colorado trying to meet that rising demand, and their product is the venue. Colorado Public Radio's Dan Boyce has more.

[Denise Leonhard]

For a long time in Colorado, to see a big epic concert you had to go to Denver, maybe to Red Rocks, an outdoor amphitheater surrounded by sandstone cliffs. But last summer, the state's second biggest city, Colorado Springs, got its own venue.

[Syreeta Jackson]

I hope when the water rises.

[Denise Leonhard]

A homegrown band called One Republic was the first to play at Ford Amphitheater. The outdoor concert space has room for 8,000 and it's kind of a boutique concept. People can sit around gas fire pits while big names play the hits. As the sun sets behind the Rocky Mountains, the Colorado Springs company behind the amphitheater called Venue wants to bring basically this exact high end event space to dozens of mid sized cities.

[Kai Rysdal]

Since there haven't been new amphitheaters built in quite some time in general, let alone in these areas, the company is being very, very tactical in terms of selecting where to create something new.

[Denise Leonhard]

Dean Budnick writes about the live music industry for magazines like Billboard and Variety venues. Pitch to cities is that these outdoor amphitheaters can bring millions of dollars in economic activity. The company often gets tax breaks or other incentives And Budnik says it's a smart model.

[Kai Rysdal]

Venues are expensive to build.

[Denise Leonhard]

Big promoters like Notes Live and AEG Presents are building new concert spaces, too, but they can't build everywhere.

[Kai Rysdal]

While it might be optimal to own the venue if one had the resources, it's, you know, there's a lot of value in just operating the venues, and.

[Denise Leonhard]

That'S the case here. AEG Presents brings in the bands that play the Ford Amphitheater. Colorado Springs was venue's first project, but the company has five more under construction in places like Oklahoma, Texas. But plopping a concert venue in a place that's not used to concert sound can cause problems.

[Syreeta Jackson]

My family and I were enjoying our last night of summer with the kids.

[Justin Ho]

Outside before they started school on Monday.

[Denise Leonhard]

This is resident Cherie Hutchison speaking to the Colorado Springs City Council. She lives close to the new venue.

[Justin Ho]

We had to cut our evening short.

[Syreeta Jackson]

As the band was screaming profanities that.

[Isabella Kwai]

Were blaring at us at over 70 decibels.

[Denise Leonhard]

She's one of hundreds of neighbors who have protested venue's amphitheater. Some residents say they can hear song lyrics loud and clear in their living rooms miles away. Budnik, the concert industry writer, says this is pretty common with new event spaces that it can take some time to calibrate the sound levels at an outdoor amphitheater. But Nick says the venue's decibel levels might be legal but still could be.

[Kai Rysdal]

Just absolutely striking to the folks who who live around the venue and never anticipated that. And that can become a flashpoint.

[Denise Leonhard]

Venue is trying to be a good neighbor. The company plans to spend $3 million on sound mitigation measures like additional walls and speaker system changes. The issue makes headlines in Colorado Springs on the regular, but Venue's CEO J.W. roth says lots of other cities are not so concerned about neighborhood noise.

[Syreeta Jackson]

They want my business there and they want us there. And so many of them have gone completely out of their way to make it easier for me, not more difficult.

[Denise Leonhard]

He points out two new hotels have sprung up next to the Ford Amphitheater and five new restaurants. He's hoping residents eventually get used to the sound of the concerts and appreciate the business they bring in Colorado Springs. I'm Dan Boyce for Marketplace.

[Syreeta Jackson]

This final note on the way out today, that sound you hear is the Federal Reserve's next interest rate cut. Leaving the station, the central bank was already all but saying it is not looking to cut rates real soon. Today's inflation report pretty much sealed that deal. Chair Powell wrapped up his two days on Capitol Hill today. The relevant quote from the morning's hearing goes like this. We want to keep policy restrictive for now, powell said. Our media production team includes Brian Allison, Jake Cherry, Justin Dueler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Dorado, and Becca Weinman. Jeff Peters is the manager of media production and I'm Kai Rysdal. We will see you tomorrow, Everybody. This is APM.

[Chen Zhao]

Consumer confidence had its sharpest monthly decline since 2021, which means we're all in our feels about money. And while uncertainty is the only constant these days, it's also a great reason to get serious about understanding personal finance. I'm Janelie Espinal, host of Financially Inclined, a podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers, dealing with money and friendship and love, entrepreneurship and student loans. Get serious about your money and build a life you've always dreamed of. Listen to Financially Inclined wherever you get your podcasts.