March 8th, 1956, San Antonio, Texas, a geophysicist named Marion King Hubbert was moments away from giving a keynote speech about global oil production. He sat on stage in the large auditorium and observed the crowd, hundreds strong, all there to hear him speak.
Hubbard was looking over his notes when a member of the staff summoned him to take an urgent call. He walked out to the lobby and took a deep breath before picking up the phone. The caller was a public relations specialist from Shell Gasoline, the company where Hubbard worked.
The PR rep, half begged, have demanded that Hubbard not share his speech or at least to tone it down. Shell's reputation, and maybe even the entire petrol industry was at stake.
Hubbard agreed that his news wouldn't bode well, but he told a rep his message was just an objective analysis, and everyone in the auditorium would have to accept that. Then he hung up, leaving the caller to stew in their anxiety, Hubbert returned to the auditorium right as another speaker introduced him.
The crowd applauded. As he took the stage, Hubbert placed his papers on the wooden podium, straightened his gray suit and began. He displayed a graph showing the projected oil production for the next 50 years. The outlook was dire. The world was running out of its most valuable resource, and once it dried up, society would collapse. Welcome to Conspiracy Theories, a Spotify original from past every Monday and Wednesday, and we dig into the complicated stories behind the world's most controversial events and search for the truth.
I'm Carter Roy. And I'm Molly Brandenberg. And neither of us are conspiracy theorists, but we are open minded, skeptical and curious.
Don't get us wrong. Sometimes the official version is the truth, but sometimes it's not.
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This is our first of two episodes on Peak Oil, a hotly debated theory that the world will run out of fuel within the next few decades without it. Countries will descend into chaos, war and devastation on a global scale. Today, we'll explore how companies historically conspired to control oil production and how the world tried to cover up Hubbard's ideas. We'll also learn how a 1970s energy shortage caused international turmoil.
Next episode, we'll take a deep dive into a few conspiracy theories about peak oil. First, we'll examine whether Nazis' first discovered how to make artificial petroleum. We'll also explore the reason why the United States and other superpowers are hording millions of barrels of gasoline. And finally, we'll investigate whether oil scarcity is just an excuse for corporations to drill in pristine nature reserves. We have all that and more coming up. Stay with us. This episode is brought to you by.
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All on drizzly dotcom. Never compromise. Drink responsibly. Wild Turkey, Kentucky straight bourbon whiskey fifty point five percent. Alcohol volume one and one proof copy. Right. Twenty twenty one. Campari America. New York. New York. In 1857, a man named Edwin Drake arrived in Titusville, Pennsylvania, to investigate the area for oil reserves, fuel had been seeping out of the ground for years, but no one knew how to fully extract it.
Drake wanted to cash in on the growing demand for oil and was determined to figure out a way to get at it after having no luck digging trenches. He decided to try a technique called cable tool drilling. Basically, Drake built a tall tower and suspended a heavy metal weight from the top. Then he dropped the weight repeatedly into the ground to crush the rock and access the black gold underneath.
But this method on its own was highly inefficient.
So Drake opted to try using a steam engine to power the cable tool drill. He had seen salt miners use one in their operations, so he figured he should do the same.
At the time, it was virtually unheard of to harvest oil this way. Drake asked his investors for more money, and they reluctantly agreed. But even with the extra funding, he couldn't find a person skilled enough to operate the device.
The residents of Titusville noticed Drake struggles and tried to convince him to give up. When he refused, the townspeople called him Crazy Drake. In April 1859, Drake was still unsuccessful and his investors dropped him. They were fed up with his unorthodox plans and furious they'd sunk two thousand dollars, the equivalent of sixty two thousand dollars today into such a worthless venture.
Abandoned and mocked, Drake invested his last 500 dollars and pressed on. Eventually, he found someone who would run the drill, a man named William A.. Smith, otherwise known as Uncle Billy.
Together, Crazy Drake and Uncle Billy dug deeper and deeper through the Pennsylvania summer heat, stopping only on Sundays to rest.
As the hole grew, it began to cave in with water, flooding the dig site and threatening to bring Drake's operations to a grinding halt. But in a stroke of genius or maybe desperation, Drake drove the drill into the ground and placed a metal pipe around it to keep the water from pouring in. In one fell swoop, Drake saved his operation and created the modern method of petroleum extraction.
Despite this invention, progress was slow until August 28th, 1859, when Drake and Billy finally hit pay dirt.
Oil bubbled up from the ground and the men collected their first batch of it in an old bathtub.
The discovery vindicated Drake's efforts, but didn't do much more than that. In a severe lack of foresight, he failed to patent his new drill. Other companies took advantage of this and rushed to the region to keep up with the competition.
Drake dug two more wells, but those only produced around thirty six barrels a day. Other local operations gathered hundreds a day, and they eventually ran Drake out of business.
He died as an impoverished old man in his hometown of Bethlehem, Pennsylvania, in 1880. Although Drake ended up penniless, other people became wildly wealthy in the oil industry in 1863, 24 year old Rockefeller had already made a sizeable fortune in the produce business. He took that money and invested in the petroleum boom by founding the Standard Oil Company in Cleveland, Ohio.
Unlike Drake, Rockefeller didn't sink his money in the prospecting craze. Instead, the cunning and ruthless businessman invested in building refineries.
People couldn't pour crude oil into a machine to make it run. Scientists had to chemically alter it to remove its impurities before it was ready to power anything.
Rockefeller chose to go into this business because it was far more stable than prospecting. Instead of having to basically guess about where a well could be, Rockefeller took what other people found and turned it into something useful.
After a few years, Standard had grown into a successful business. But Rockefeller still wasn't satisfied. He bought out his competitors in Ohio at one point in 1872. He went on a shopping spree and purchased 22 other refineries in less than six weeks.
This gave Rockefeller almost total control of the state's industry. Economists call this a monopoly.
A monopoly occurs when one company is the sole provider of a good or service without competitors. The business has no accountability or motive to be better. It can raise its prices, provide poor products and blow off customer concerns.
Today, many kinds of predatory monopolies are illegal.
A Rockefeller was the first person to create one, so there weren't any laws against his dangerous business practices. Yet Standard just kept steamrolling the competition and even gained control of companies that weren't directly related to oil production, things like railroads.
In 1882, businesses needed to pay extremely high fees to transport their goods on trains to cut costs. Rockefeller promised the railroad companies that he would use their services exclusively in specific regions of the country.
But there was a condition if the railroads wanted Rockefeller's business, they needed to drastically cut his shipment payments while keeping them high for other refineries.
Experts refer to this kind of partnership as a trust, which is a large group of businesses that cooperate with each other to create an unfair advantage over the competition. Ultimately, these deals enabled Rockefeller to expand his operations beyond Cleveland and into the rest of the United States. Rockefeller's success has inspired him to find more ways to sink his opponents. He reportedly bought up all the chemicals necessary for processing oil when his rivals couldn't do their job and went bankrupt and had to sell their companies to standard for much less than they were worth.
His merciless tactics paid off by the 80s. The 41 year old's empire included 20000 domestic wells, 4000 miles of pipeline, 5000 tank cars and over 100000 employees in total. These figures meant that Rockefeller controlled 90 percent of all oil refining in the United States.
Standards massive size alarmed its few remaining competitors, as well as policymakers throughout the country. In 1986, the U.S. government brought a case against them. The trial proved that standards trust was illegal and it catalyzed laws which banned all other trusts as punishment. The judge ordered the gargantuan company to break apart.
Within six months, Standard complied and split itself up into smaller companies scattered throughout the nation. These organizations included Standard Oil of California, Standard Oil of New Jersey and Standard Oil of New York.
By the government's plan may have backfired. Through a series of business deals and partnerships, the smaller businesses grew as well and became the Exxon, Chevron and Mobil we know today.
In other words, Standard Oil never really went away. It just evolved. Coming up, we'll look at how corporations sidestepped government policies, sabotaged their competitors and continued to line their pockets.
Hi, it's Vanessa from Parks Network, and I'm thrilled to tell you that this month marks a huge milestone for us.
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Although national laws slashed the petrol companies power and the late eighteen hundreds, they didn't stay small for long. The rise of the car industry in the early 20th century created an unprecedented demand for oil. This new market meant tycoons like John D. Rockefeller could regain their power and influence.
In 1930, there were 26 million registered vehicles in America, and automakers like General Motors watched their profits soar. But despite this meteoric rise, one thing stood in the way of GM's continued growth public transportation.
Before gas powered motors, people traveled around cities using mass transit, which included electric trolleys.
These methods were faster and cheaper than horse drawn carriages, and it meant that cities weren't incentivized to transition to gas powered vehicles like buses.
Plus, the general public preferred the low fees of a trolley compared to the steeper prices of owning an automobile.
Normally, most companies would try to slowly change consumer behavior over time, but not GM.
They wanted people to buy their cars fast. So in 1936, they formed a trust with Firestone tires, Standard Oil of California and other automotive companies to undermine the threat of public transportation.
Although the trust was illegal. GM and its accomplices didn't care.
They were simply more discreet about their behavior instead of conducting all their operations under their own name. The trust created a holding company called National City Lines, also known as NCCL, using NCL as a front.
The trust began buying streetcar routes and tearing the trolley tracks out of the ground. They hoped this would have a twofold effect. One, it would force cities to transition away from electric power, transit and to without free transportation. People would have to buy cars from GM, tires from Firestone and gasoline from standard.
By the late 1940s, it appeared that the NCCL was successful on both fronts. The company controlled 46 systems in 45 cities across 16 states, but there was a flip side to their expansion. The bigger they got, the harder it became to hide what they were doing.
In 1946, a man named Edwin Quimby blew the whole story wide open. Quimby was the founder of the Electric Railroads Association, which lobbied on behalf of rail services and public transportation.
He published a 24 page Telo pamphlet about the unseals efforts to destroy electric transit.
Quimby sent this document to mayors, congressmen and city managers throughout the U.S. In his opening remarks, he wrote, This is an urgent warning to each and every one of you that there is a carefully, deliberately planned campaign to swindle you out of your most important and valuable public utilities, your electric railway system.
Political leaders received paranoid letters like this all the time, but can be presented enough evidence to draw government attention. On April 9th, 1947, the federal court in Southern California charged the corporations with, quote, conspiring to acquire control of a number of transit companies and forming a transportation monopoly.
After a two year legal battle, GM, Firestone and other co-conspirators were found guilty in 1949. In 1951, GM attempted to appeal the court's decision, but they were unsuccessful. They couldn't present enough evidence to prove their innocence.
Ultimately, the guilty verdict didn't affect GM. Its treasurer only had to pay a one dollar fine, and the rest of the company forfeited a mere 5000 dollars.
Conspiracy theorists claim this insignificant punishment prove that the corporation had undue influence over the criminal justice system.
Others believe the paltry fee just reinforces the idea that GM didn't do anything that bad.
No one knows why the punishment was so light. But one thing is for sure. Sometimes conspiracy theorists like Quimby are right. Even if GM had received a significant fine, they would have easily recovered. The postwar United States was booming. Dealers sold cars at record rates and fossil fuels seem to be in unlimited supply. Despite this optimism, a few people started to wonder whether it would last. That's exactly what a geologist and geophysicist named Marion King Hubbert wanted to know in the mid 1950s, Hubbard was a Ph.D. holding researcher who used his advanced knowledge about the Earth's crust to help petrol companies find the best places to dig wells.
He was also deeply interested in how fuel usage affected the United States finances.
In the 1950s, the economy was growing at a robust rate and companies were drilling like crazy to meet the nation's energy demands. Economists assumed the production would continue forever, but Hubbard doubted their confidence. He noticed that many of the wells had dried up.
No one thought it was much of an issue because they would just move to new locations. But Hubbard feared that the unrestrained extraction was bleeding the earth dry of the nonrenewable resource.
Despite these concerns, Hubbard became one of the chief geophysicists at the shale gas research facility in Houston, Texas. And instead of creating fuel efficient technology or finding alternative sources of energy, he did something surprising. He took the data Shell's researchers collected and used it to find more wells.
At first glance, this seems grossly hypocritical for someone who spoke out against the United States. Consumption habit was now playing an active role in depleting the resource.
That's a fair assumption. But he may have had pure motives for joining Shell. As one of the lab's most senior researchers, Hubbard knew he'd gain an intimate understanding of how much fuel remained in the ground.
Plus, he could use Shell's vast resources to legitimize his theory that the world was running out, although he joined the side of the perpetrator.
Robert still believed the U.S. needed to wean itself off of fossil fuels. In fact, he remained very outspoken on those beliefs. Even as he worked for Shell while attending a conference, Hubbert was shocked to hear one speaker say that the world still had one point five trillion barrels of oil left enough to support all of humanity for several hundred years.
Hubbard believed this estimate was grossly optimistic at the end of the session. He challenged the speaker in front of the entire audience, boldly decrying the man's claim as a, quote, exercise in metaphysics and quote, The presenter fired back, reminding the audience that no one knew how much oil actually remained in the earth.
Hubbard couldn't disagree with this, and the dispute ended in a stalemate. As unpleasant as the encounter was, it, said Hubbard on a quest to finally determine exactly how much oil the world had left.
He worked tirelessly until the mid 1950s and he took advantage of every tool and method Shell had at its disposal, including seismic imaging, seismic imaging was one of the most popular techniques of the day.
Scientists would fire vibrations into the ground and determine if oil was underneath based on how the waves ricocheted off the subterranean rock formations.
Hubbard combined these readings with similar reports from other companies, as well as other estimates from professionals in the industry. As the years went by, his figures led him to develop a theory called Petroleum Peak Production, a.k.a. peak oil and short.
Hubbert defined peak oil as the point in time when global production would reach its ceiling and eventually decline.
For Hubbert, a lack of oil didn't just mean people wouldn't be able to drive their cars or the companies would go out of business. The stakes were so much higher.
Hobert believe that fossil fuels were one reason why the human population had grown so large. Before their discovery, only 500 million people walked the earth and 16 50.
That number shot up to the billions in the 19th and 20th centuries. This was in part because petroleum based products dramatically improved every aspect of human life, from leisure to life expectancy.
Oil made transportation easier and far less dangerous. Fertilizer companies used it to grow more crops and feed more people. It was a key ingredient in plastics, which you can find in nearly every modern day commodity, from toys to life saving medical devices.
Needless to say, this thick sludge has played an irreplaceable role in every human endeavor since its discovery. Because of this, Hubbert warned that a drop in production would mean a drop in population as well.
This theory jeopardized Hubbard's career at Shell, but he didn't let it stop him from spreading the news. The world deserve to know the real state of the oil supply. Hober just needed to find a way to share his message with a wide audience.
That opportunity came in 1956, when Hubbard received an invitation to speak at a conference for the American Petroleum Institute, or API.
At the time, the API was the oil industry's main lobbying arm in D.C.. Unlike Hubbards, the organization had an optimistic view on national and global reserves, so it would be tough to convince them of his perspective.
Nonetheless, Hubbard presented his theory to its members in front of hundreds of his colleagues. He unveiled his reports saying that the United States production would peak between 1965 and 1970. Afterward, he claimed production would decline until there was nothing left, which would cause a national energy crisis.
Hubbard's calculations for global output didn't look much better. International numbers would peak around the turn of the century in the early 2000s. If he was correct, there was only 50 years of oil left in the world in one article, Hubbard said.
The future of our civilization largely depends on whether humanity will be able to evolve the culture in conformity with the limitations imposed upon us by the basic properties of matter and energy.
Simply put, humans need to cut down on their oil usage or risk getting sent back to the Dark Ages.
On an intuitive level, Hubbert's theory seems plausible. Like every other resource in the world, there is a limited supply of oil. Logically, at some point there must be a peak in production and subsequent decline.
Despite this reasoning, Hubbert returned to his lab at Shell to find the place in an uproar. No one wanted to fire him because he was such a brilliant scientist. But they doubted his claims. They scrambled to conduct their own internal investigation to determine if his theory was accurate.
Although Shell grudgingly took Hubbard seriously, most of the other major players in the industry didn't.
In fact, in the months after Hubbard gave his presentation, companies across the U.S. continue to project abundant supplies for decades to come. One research firm declared that North America alone could still produce 500 billion barrels, meaning they wouldn't run out for well over 100 more years.
Hubbert waited patiently for Shell to run its own tests, confident that their conclusions. Would align with his own, but whatever Shell's internal review discovered, they never divulged it, perhaps they were trying to cover up the fact that Hubbard had been right.
Coming up, the Western superpowers faced their first energy crisis.
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Indeed. And now back to the story, in 1956, a geophysicist named Marion King Hubbert sounded the alarm about society's rampant oil consumption. He estimated that the world would run out of petroleum in the next 50 years and wreak havoc on a global scale. Despite the dire warnings and the evidence he provided, everyone ignored him.
In 1957, a year after Hubbard shared his theory, American demand for oil was growing and suppliers began importing more and more barrels from overseas.
This dependence on foreign suppliers alarmed U.S. President Dwight D. Eisenhower. If anything happened to the supply chain, it would cripple the American economy.
His fears might have bordered on paranoid, but the United States was in the throes of the Cold War. It was essential to remain self-sufficient, to wean the nation off overseas petroleum.
Eisenhower introduced the mandatory oil import quota program. This meant the U.S. could only import nine percent of its fuel. They had to produce the other 91 percent within their borders.
This bill also gave preferential treatment to Mexican and Canadian companies, as opposed to those in other countries. Strategically, shipping from neighboring nations cost less and gave the U.S. greater control over what cross national lines.
Eisenhower's policy seemed favorable to the seven largest oil companies in the world. These corporations, known as the Seven Sisters, included those which would come to be known as Exxon, Chevron, Mobil, Gulf, Texas, British Petroleum and Shell. Most of these were American run and benefited from the policy to buy domestically.
Although the quota positively impacted the United States, it negatively affected several foreign countries before the Middle East had been the largest supplier to the states without U.S. business.
These nations lost valuable revenue and experienced economic hardship, feeling cheated.
Saudi Arabia, Iran, Iraq, Kuwait and Venezuela banned together in 1960.
Together, they formed the Organization of Petroleum Exporting Countries, otherwise known as OPEC.
With their combined power, they controlled 80 percent of the world's crude exports. They believe that by joining forces, they could influence the international market and resist detrimental policies. Unfortunately for them, the U.S. and other superpowers largely ignored them.
But OPEC got its chance to assert its power.
In the 70s, the United States domestic output first started to decline in 1971 and continue to drop through 72 and 73.
That could only mean one thing. Hubbert's prediction that American oil production would peak in the 1970s had come true. Faced with this earth shattering reality, President Richard Nixon lifted Eisenhower's quota on foreign imports in July 1973. For a few months, it seemed the nation had dodged a serious shortage. The U.S. received all the fuel it needed, and OPEC happily provided it.
Unfortunately, Nixon had only postpone the crisis. On October 6th, 1973, Egypt and Syria went to war with Israel.
To make matters more complicated. This was the height of the Cold War between the U.S. and the USSR. The two superpowers never fought openly, but they funded countries who shared their political ideologies.
So the Soviets supported Egypt and Syria. They hope the two countries would join the Soviet Union and provide them with greater access to the region's wells.
Naturally, the U.S. opposed the Soviets and backed Israel. They wanted to prevent the communist superpower from gaining a foothold in the region.
This divide presented the perfect opportunity for OPEC, who supported Syria and Egypt. They opted to place an oil embargo on all of Israel's allies, including the United States. Suddenly, OPEC had become a serious threat to Western stability.
The states immediately felt the impact. Gas prices rose 43 percent and local leaders instituted a rationing program.
Nixon added to these measures by officially asking filling stations to close from Saturday night through Sunday. He hoped this would curb needless. Waste by discouraging non-essential weekend travel because cars use more fuel when they go faster. Nixon also set the national maximum speed limit to 55 miles per hour. State governments and citizens not to put up Christmas lights. Oregon even went so far as to ban commercial lighting altogether, which meant businesses couldn't advertise when they were open, although people could still light their homes.
The shortage meant they struggled to heat them. Those who had fireplaces resorted to burning wood and newspapers to keep the cold at bay.
Despite these efforts to cut back, nearly 25 percent of U.S. gas stations had run out of fuel by the winter of 1974. The remaining 75 percent had extremely long lines, and some people even got into fistfights to protect their spot.
Those who didn't want to wait in line resorted to stealing gas, and drivers started carrying guns to ward off thieves. One photographer who'd been hired by the Environmental Protection Agency to document the crisis snapped a particularly striking image. He captured a father and his pre-teen son, both of whom scowled while standing next to their car. The father brandished a handgun, and the son held a sign that read, Gas dealers, beware, we're loaded for bear.
As bleak as things seemed, the situation was far worse internationally. Other countries that couldn't produce as many barrels as the U.S. completely banned flying, boating and driving on Sundays. The Netherlands even went so far as to jail anyone who went over their daily quota of electricity.
The UK suffered its own energy crisis. Its coal miners were on strike because they wanted more pay like everyone else. The prime minister instituted travel bans and also asked citizens to only heat one room of their home during the winter.
England's experience provided a shocking portrait of life without fossil fuels.
By the end of 1973, things had gotten so bad that Nixon's advisers briefly considered attacking the OPEC nations and seizing their distribution centers. They ultimately abandoned the idea because they didn't want to risk open war and further drain their supplies.
Needless to say, the United States was on its knees.
In January 1974, the superpower gave up and negotiated with OPEC.
The organization agreed to lift the embargo if the American government settled the conflict between Israel, Egypt and Syria. The U.S. complied and helped the warring countries reach a cease fire.
On March 18th, OPEC upheld its end of the deal and lifted the embargo.
Although it took the rest of the decade to fully recover, America was back to consuming roughly 17 million barrels a day by the 1980s.
After all this turmoil, it seemed like Hubbert was right. U.S. production did, in fact, hit its peak in the 70s, and it declined over the next several decades. However, the crisis wasn't caused by a lack of oil like Hubbard had predicted. There was still plenty of petroleum in the ground. Drillers in the 70s simply didn't have the technology to extract all of it. However, new innovations helped American production rise in 2009 and hit an all time high in 2019.
Hubbard's prediction about peak global production was also wrong. The world didn't reach maximum output in 2000, and extraction has only increased through the years.
Hubbard was wrong about the timing, but he was right about how the world would react to a shortage. The OPEC embargo proved his point. If people had such a hard time adjusting during a trade war, imagine how they'd react if the planet really didn't have any oil left. It's likely that civilization would destroy itself in the ensuing fallout.
Today, the world consumes about 97 million barrels a day, with the U.S. devouring 20 million alone. At this rate, the U.S. Energy Information Administration estimates the planet only has enough fuel left to last through 2050, just three decades away. But that doesn't necessarily spell disaster for humanity. If anything, it means people will need to rely more heavily on alternative methods of fuel. The problem is the transition will likely be very difficult.
Perhaps there are ways to make the shift easier. Next time we'll discuss conspiracy theory. Number one, the Nazis solved the energy. Crisis by inventing artificial oil, however, the allied powers covered up the discovery after the war to keep prices high.
Conspiracy theory number two, countries all over the world are hoarding crude reserves in preparation for the world to run out. The race for more fuel could be the real reason why nations go to war.
And conspiracy theory number three, big corporations want people to believe that wells are drying up. That way, they can get permission to drill offshore in the Antarctic and on wildlife preserves.
In our next episode, we'll try to squeeze the last drop of truth from these peak oil theories.
In the meantime, remember to turn off the lights when you leave a room just in case we really are on the brink.
Thanks for tuning into conspiracy theories. We'll be back next time with part two on Peak Oil. For more information on the topic, we found the Oracle of Oil, a maverick geologist's quest for a sustainable future by Mason Inman.
Helpful to our research, you can find all episodes of conspiracy theories and all other Spotify originals from Park asked for free on Spotify.
Until then, remember, the truth isn't always the best story, and the official story isn't always the truth.
Conspiracy Theories is a Spotify original from Paşa Cast. It is executive produced by Max Cutler Sound Design by Scott Stronach with production assistance by Ron Shapiro, Carly Madden and Travis Clark. This episode of Conspiracy Theories was written by Robert Hecate with writing assistance by Angela Jorgensen and Ali Whicker, fact checking by Annibale and research by Bradley Klein. Conspiracy theory stars Molly Brandenberg and Roy. Hi, listeners, it's Vanessa again. Before you go, don't forget to check out the Spotify original from podcast Serial Killers each week.
Join me and my co-host Gregg for a deep dive into the minds and madness of history's most notorious murderers. You can binge hundreds of episodes, four years worth and catch new episodes every Monday and Thursday. Listen to serial killers free on Spotify or wherever you get your podcast.