Alboran Energy Strategy Consutlatns

2023

  • Energy Musings, September 14, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    September 14, 2023

    Will New BP CEO Toe The Green Agenda Or Target O&G?

    BP CEO Bernard Looney has resigned over disclosure issues of past dalliances with company employees and previous assurances he made to the Board of Directors about his future actions. Given the details and timing of the resignation, some wonder if the poor stock price performance reflecting Looney’s commitment to more green energy also played a role in his leaving. BP directors have an opportunity to reset the company’s strategy, but will it or will it continue the current push for a greater role by renewable energy with its lower profitability? READ MORE

    Will New BP CEO Hue The Green Agenda Or Target O&G?

    Tuesday, the BP family was rocked with news that CEO Bernard Looney was resigning immediately to be replaced on an interim basis by current CFO Murray Auchincloss. The company’s press release, “bp CEO resigns,” outlined the basics of the story. Two years after Looney was appointed CEO, the Board of Directors received information from an anonymous source that he had personal relationships with company employees that had not been previously disclosed. With the assistance of outside counsel, the Board reviewed the allegations.

    During the Board’s investigation, Looney told the directors of a “small number of historical relationships with colleagues prior to becoming CEO.” The Board’s review of the information concluded no breach of the Company’s Code of Conduct had occurred. At that time, the Board was given assurances by Looney about the details of these relationships and his future behavior. Recently, another anonymous source provided information questioning Looney’s assurances that reopened the investigation that is reportedly still ongoing. We assume the ongoing investigation is involved in helping the Board determine what compensation is owed to Looney.

    As the BP press release stated: “Mr. Looney has today informed the Company that he now accepts that he was not fully transparent in his previous disclosures. He did not provide details of all relationships and accepts he was obligated to make more complete disclosure.”

    According to Wikipedia, Looney married British life coach Jacqueline Hurst in October 2017. They separated in 2018 and divorced in 2019, three months before Looney became CEO. According to her 2021 book, in a chapter on anxiety, Hurst claims Looney only married her to get promoted at BP. She also said that he ended the marriage with a WhatsApp message.

    At the time, The Sunday Times interviewed a friend of Looney’s who said, “He was briefly married during a period in which he wasn’t promoted. So, if he married her to get promoted, that didn’t seem to have worked. Maybe he divorced her to get promoted.”

    For the second time in two decades, BP has lost its CEO over undisclosed personal relationships that question honesty and judgment. It also raises questions about the integrity of the Board’s CEO search process. Interestingly, the other CEO, Lord John Brown, had his previously undisclosed personal relationship publicized by a London newspaper. Some investors are wondering whether another judgment issue is playing a greater role in Looney’s departure than his dalliances. This question underlays a recent Wall Street Journal article about BP’s future strategy.

    Read the full article on Energy-Musings.com »

  • Energy Musings, September 11, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    September 11, 2023

    The Changing Electric Vehicle Landscape

    The EV revolution is continuing with all the support and directives governments can mount. Still, we have seen some slowing of the momentum, which promotors will say is more about overall economic growth trends and concerns. But the biggest news about this revolution is that the Chinese are becoming larger players with better and cheaper vehicles than they previously offered. Fifty Chinese EV companies, twice the previous number and the largest contingent to attend any global auto show, were at the recent Munich auto show. The EV landscape is changing, and like how China has taken over the solar panel market, onshore and offshore wind components and installations, and the lithium-ion battery market, EVs are their next target. The legacy auto company managers are beginning to wake up to the new competitive landscape. What can they do about it? READ MORE

    The Changing Electric Vehicle Landscape

    A recent article by INSIDEEVs reported on June 2023 global sales of electric vehicles (EV) along with how they fared during the first six months of the year. The headline summed up the market’s health: “Global EV Sales In June 2023: Over 1.26 Million Plug-In Cars Sold – It was almost a new record, marginally behind December 2022.” That sounds pretty good, no? But no record? Is that because there is no Christmas in June? Or maybe it’s because EV buyers, wanting to maximize subsidies they can receive when buying these costly vehicles and fearing reductions in 2023 rushed to buy in December?

    With June sales falling below last December’s, is there a problem in EV land? The June and year-to-date EV sales figures would suggest that if there is one, it is not obvious. June sales were up 38% over last year, and the six-month figures were 40% higher than for the first half of 2022. Sounds like a healthy market. Unfortunately, because not all automakers release monthly sales it is hard to know about market conditions monthly.

    What is changing is the competitive landscape for EVs. China is leading the charge both as the largest EV market on the planet and now as its auto companies are crashing western automobile markets ‒ except the U.S. The IAA Mobility auto show in Munich, Germany demonstrates just how much the EV playing field is changing in Europe, and is a precursor of a changing worldwide market.

    Chinese EV manufacturers stormed the auto show, setting up in 50 company booths. That is not only twice the number that showed up at the last show, but it also is the largest number of Chinese EV companies to attend any global auto show. Forget Paul Revere’s cry “The British are coming!” Now it’s “The Chinese are coming!” And because the Chinese EV companies have prized battery efficiency over vehicle bigness, the industry hopes to gain market share with lighter, cheaper models.

    Before the Munich auto show, Luca de Meo, CEO of auto manufacturer Renault, told a French radio show audience, “It’s clear that they are more competitive in the electric car value chain. I think they are a generation ahead of us.” His message to his competitors was: “We need to catch up very, very quickly.”

    Yes, global auto manufacturers are coming to understand that China’s autos and its EVs are suddenly in a different league than they were a few years ago. Their cost and quality progress are reminiscent of how the Japanese auto industry evolved – from small, poor quality cars to now providing some of the highest quality vehicles in the global market covering the entire range of models, and they are lower cost.

    Read the full article on Energy-Musings.com »

  • Energy Musings, September 5, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    September 5, 2023

    Weather Versus Climate Change

    This summer has been dominated by news of record-setting heat waves. Houston, our home, was prominently featured in those record heat stories. In Rhode Island, the state set a record – fourth year in history ‒ without a 90-degree temperature during June, July, and August! When we started looking at how temperatures in Houston, Rhode Island, and nationwide compared with history, we found some interesting surprises. The biggest being was this past winter when temperature records were being broken in Houston and Rhode Island. READ MORE

    Weather Versus Climate Change

    Climate change is a hot topic (pardon the pun), and not just because much of the country has been living under a heat dome. We have avoided the worst of the nation’s heat waves by spending the summer at our vacation home in Rhode Island. Last week, The Providence Journal posted a headline saying that there had not been any 90-degree temperatures registered officially during June, July, and August at the state’s weather station at T.F. Green Airport in Providence. Wow! We knew it had been a cool summer here, but we were unaware of just how cool it was. The Providence Journal article pointed out that since 1905, only three other years did temperatures fail to reach 90 degrees: 1962, 1951, and 1932.

    A local meteorologist said that while the chances of 90-degree temperatures in September are low, the month averages about one 90-degree day. The rarity was September 1983 which experienced nine 90-degree days. The current weather forecast for this week is targeting temperatures to reach 90 degrees for one day before a cooling trend moves in sending temperatures down about 8-10 degrees on average.

    All summer, the media reported how these U.S. heat waves were unprecedented. Yes, we had record temperatures in places, but history shows that they were not as pervasive as reported. But for a media intent on accentuating the worst of the weather and trying to link it to climate change, it was not hard for reporters to find one-off episodes of how much people’s lives were impacted by hot temperatures.

    Our home in Houston experienced significant heat this summer along with a lack of rainfall. The latter became serious enough that the City of Houston instituted a watering ban in late August, something we don’t remember happening for many years. Population and business growth in Houston and Texas are putting increased pressure on local water systems. In the Houston area, the gumbo soil is sensitive to moisture content, so movement associated with drier conditions can cause water mains to leak or break resulting in thousands of gallons of water being lost. More money and workers will be needed to address this problem. And more rain would help.

    But heat is our focus. A chart from the Houston Chronicle showed the number of 100-degree days in Houston by year. Through September 3, there have been 41 days of century temperatures. That total still trails 2011’s record of 46 days of triple-digit temperature days. Will 2023 catch 2011?

    Exhibit 1. Houston’s 100-degree Days First Record Summer Was In 1902

    Read the full article on Energy-Musings.com »

  • Energy Musings, September 1, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Downdoad the PDF

    September 1, 2023

    NJ Calls It “Choice” But It Is Really About “Free Money”

    The Governor of New Jersey is telling his residents that the legislation to ban the sale of internal combustion vehicles by 2035 is all about improving their choices in buying cars. Buy used or go next door are the answers for those who do not want an EV or hybrid. His climate director gave away the game: there is so much free money residents would be short-changing themselves if they didn’t grab some of it. Washington’s money printing press drives government policies. READ MORE

    Last Tuesday’s Duds For Offshore Wind

    BOEM’s Gulf of Mexico offshore wind lease sale received only two bids for the single Louisiana lease offered, while the two leases off Texas received no bids. The offshore wind movement took a hit. There are numerous reasons why developers were reluctant to bid. The same day, leading offshore wind developer Ørsted announced a $2.3 billion impairment of its U.S. offshore wind portfolio, the second impairment in 12 months. Inflation, capital costs, and reduced subsidies are the reason. The company is having similar problems with its North Sea projects. Ørsted’s stock fell by 25% as investors question if the bad news is over. READ MORE

    August Market Doldrums Are Over And Energy Did Well

    Energy was the best-performing sector for August, giving the sector a second consecutive month in the top spot. Fundamentals for the sector continue to improve, which enabled oil prices to rise over August. It appears global oil demand is growing, and supply is restrained supporting higher oil prices and energy company earnings, which drive stock prices. The balance of 2023 may see these trends continue. Enjoy the ride. READ MORE

    NJ Calls It “Choice” But It Is Really About “Free Money”

    New Jersey Governor Phil Murphy is a big green energy promoter. As the Wall Street Journal pointed out in an editorial, he wants to force residents to buy electric vehicles (EV) to save the planet. He has pushed the state to adopt California’s ban on the sale of new internal combustion engine (ICE) vehicles by 2035, barely over a decade from now. Murphy has not only championed EVs, but he also led the charge to give the state’s share of federal tax revenues from offshore wind destined for residents’ pocketbooks back to Ørsted, the Danish developer of the Ocean Wind project which has become a lightning rod of political outrage.

    By wanting to burnish his green credentials, Murphy pushed to have New Jersey, one of the 17 states that routinely follow California’s auto standards, join the dozen states that have also signed onto the ban on ICE vehicle sales. Murphy is selling his proposal as expanding the vehicle choice options for residents while disguising the reality that their ability to purchase a new ICE vehicle is going to be restricted as the state heads toward the 2035 ban.

    Read the full article on Energy-Musings.com »

  • Energy Musings, August 28, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    August 28, 2023

    The Frozen Climate Views Of The IPCC

    The CLINTEL Foundation has published a book examining key sections of the IPCC’s AR6 report based on research by a team of climate scientist members. The team looked at 13 key topics supporting the IPCC’s narrative that CO2 is single-handedly destroying the planet’s climate. The CLINTEL team identified examples (there are many) where the IPCC ignored important climate data and studies because they undercut the CO2 narrative. This is an important book and should be read by everyone interested in understanding the climate change issue, the science supporting onerous climate change policies, and how nature plays a role that is being ignored by the IPCC. READ MORE

    The Frozen Climate Views Of The IPCC

    In May, the Climate Intelligence Foundation (CLINTEL) published a book analyzing portions of the latest climate assessment report of the Intergovernmental Panel on Climate Change (IPCC). We recently completed reading the 181-page book, The Frozen Climate Views of the IPCC, and recommend everyone should read it for a more balanced assessment of the state of the climate change issue. The book illuminates scientific evidence and studies ignored by the IPCC because they might undercut the narrative of CO2 single-handedly destroying the planet’s climate. The book is available at the usual spots – Amazon, Barnes and Noble, etc., but you also can download a copy from the foundation’s website.

    Exhibit 1. A Treasure Trove Of Climate Clarity

    Source: CLINTEL

    Netherlands-based CLINTEL was founded in 2019 and currently has 1600+ scientist members who have signed the foundation’s World Climate Declaration stating that there is no climate crisis. The foundation’s objective is to generate knowledge and understanding of the causes and effects of climate change as well as the effects of climate policy. The listed objectives of CLINTEL include:

    1. Communicating objectively and transparently what facts are available about climate change and climate policy and identifying where facts turn into assumptions and predictions.

    2. Conducting and stimulating public debate about the issues along with carrying out investigative reporting in this field.

    Read the full article on Energy-Musings.com »

  • Energy Musings, August 24, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    August 24, 2023

    Is National Fisheries Pissed At BOEM?

    The latest comment letter from the National Marine Fisheries Service to BOEM about the Beacon Wind offshore projects. NWFS has concerns with the plan and was sharply critical of the way BOEM has handled the agency’s prior comments and concerns. The gauntlet was thrown down with the warning that continued ignoring of NWFS concerns would lead to a rejection of a “no jeopardy” ruling that would derail the wind farm’s development. How much is the surge in whale deaths playing in this interagency dispute? Another dead whale washed ashore on Monday – now 66 since December 1, 2022. READ MORE

    Is National Fisheries Pissed At BOEM?

    We recently read the August 14, 2023, cover letter to the Bureau of Ocean Energy Management (BOEM) from Michael Pentony, the Regional Administrator of the Greater Atlantic Regional Fisheries Office of the National Marine Fisheries Service (NMFS). NWFS is part of the National Oceanic and Atmospheric Administration (NOAA). The letter was in response to BOEM’s request for comments related to its Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for the construction, operation, and decommissioning (COP) of Beacon Wind Energy LLC’s proposed wind energy facilities (Beacon Wind 1 and 2) off the coast of Massachusetts.

    Pentony wrote of his organization’s concerns with the plan and recommended approaches to help ease the regulatory process. The letter also contained criticisms of BOEM’s work, with NWFS’ sharpest rebuke in the opening paragraph of Appendix A attached to the letter. The critical comment reflects frustration with BOEM’s treatment of NWFS’ input to previous requests for comments about various offshore wind projects. Here is what NWFS wrote in that opening paragraph in a section headed “Purpose and Need.”

    “Since NMFS is an action agency and anticipating a request for incidental take authorization under the MMPA [Marine Mammal Protection Act], we need our Purpose and Need for the action to be clearly stated in the EIS. While BOEM did provide cooperating agencies an opportunity to coordinate on development of the Purpose and Need for the EIS before publication of the NOI, corrections provided by NMFS were not incorporated in the Purpose and Need statement included in the NOI. Some of the edits made by BOEM are additional deviations from previously agreed upon language. We recommend this be corrected in the DEIS [Draft Environmental Impact Statement] by incorporating previously provided revisions for Beacon Wind and following template language developed through extensive interagency cooperation in 2022, including for the NMFS-specific purpose and need.”

    Where does this frustration with BOEM come from? Most likely it began with the December 1, 2021, comment letter about the Mayflower Wind (now known as SouthCoast Wind) NOI to prepare an EIS. In those comments, NMFS discussed the speed with which BOEM was putting out requests for input and information about various offshore wind projects, which was not allowing adequate time for the agency to respond. Pentony wrote in his cover letter for NWFS’ comments on the SouthCoast Wind project:

    “The high number of projects moving through the NEPA [National Environmental Policy Act] process between now and 2024 makes it very difficult for us to provide the detailed level of review and interagency cooperation we have provided in the past. The extensive interagency cooperation we have invested with you to improve the NEPA documents for previous wind energy projects is no longer feasible, and we will be required to take a more limited Cooperating Agency role in the process.”

    So BOEM was working so fast that a key agency that advises on the maritime and fishing environmental risks of offshore wind couldn’t do its job properly. Is that like a doctor skipping an examination before telling you what you must do to cure an illness?

    Read the full article on Energy-Musings.com »

  • Energy Musings, August18, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    August 18, 2023

    Offshore Wind’s Whale Problem Getting More Attention

    Thrown To The Wind, a documentary by Michael Shellenberger highlights the issue of underwater noise from offshore wind construction activity and its potential link to the surge in whale deaths. We are killing humpback whales at twice the rate for a sustainable population! READ MORE

    Canada’s Clean Energy Moves

    Two announcements in Ontario about building new nuclear power plants may eliminate the province’s long-term power projected shortfall. Our west, Eco-Refinery is planning to build a GTL plant producing clean diesel fuel that is better for the environment and diesel consumers. READ MORE

    New England Electricity Users Rest Easier – Should They?

    New electricity demand forecasts, plus more behind-the-meter solar and delayed power plant closures are giving ISO-NE officials greater comfort that winter blackout risk is reduced. READ MORE

    Offshore Wind’s Whale Problem Getting More Attention

    The rising number of dead whales washing ashore along the East Coast of America is drawing greater scrutiny. Michael Shellenberger, an author, former public relations official, and investigator of the Twitter Files, who now publishes a newsletter on Substack.com called Public News, has begun writing about the dead whale issue. More importantly, an organization he started, Environmental Progress, along with his newsletter has produced a 30-minute documentary on the issue of underwater noise from offshore wind construction activity and its possible impact on whales. The movie highlights how loud underwater noise may contribute to the recent surge in whale deaths despite the government’s denial of any linkage. It certainly demonstrates how uncomfortable the noise is for humans!

    Starting in 2017 and up to November 2022, North American right whales have been suffering from an “unusual mortality event” with nine whales dying from entanglement with fishing gear and 20 from injuries. The National Oceanographic and Atmospheric Administration (NOAA) has noted that the recorded deaths represent only those known to the public because the carcasses washed ashore. Any whale dying offshore where the carcass sinks to the ocean floor remains unknown. We have no accurate whale death toll.

    Read the full article on Energy-Musings.com »

  • Energy Musings, August 12, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    August 12, 2023

    The Unlevel Offshore Regulatory Playing Field

    Offshore wind has been adopted as the high-value way for America to cut its carbon emissions and stop climate change. The Biden-Harris administration has established a goal of installing 30 GW of offshore wind generating capacity by 2030. This goal has motivated offshore energy regulators to move aggressively to approve new wind projects. They have gone from impartial regulators to offshore wind cheerleaders. As they administer the regulatory process, they often ignore the laws and rules that should be governing the offshore wind program. Those laws and rules govern offshore oil and gas. Why are oil and gas treated differently than offshore wind?

    READ MORE

    The Unlevel Offshore Regulatory Playing Field

    “As part of the Biden-Harris administration’s goal of deploying 30 gigawatts of offshore wind energy capacity by 2030, the Bureau of Ocean Energy Management (BOEM) today announced it will initiate the environmental review of a proposed 2,430-megawatt wind energy project offshore Massachusetts.” That was the opening line of BOEM’s June 29th press release announcing the publication of its Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for the Construction and Operations Plan (COP) submitted by the wind project’s developer, Beacon Wind, LLC. One more offshore wind (OSW) project is moving forward.

    The announcement signaled the opening of the review process for Beacon Wind, whose highlights were described in the press release:

    “Construction and operation of two wind energy facilities (Beacon Wind 1 and Beacon Wind 2) offshore Massachusetts with a total capacity of at least 2,430 megawatts of clean, renewable wind energy, which could power over 850,000 homes each year.

    “Installation of up to 155 turbines, up to two offshore substation platforms, and up to two offshore export cables, which are planned to make landfall in Astoria, New York, and Waterford, Connecticut.”

    Those 155 wind turbines represent roughly 5% of the total expected to be approved by BOEM in support of the Biden-Harris administration’s OSW program. The program calls for building 30 gigawatts (GW) of offshore wind generating capacity by 2030. This will require 3,000 offshore wind turbines pounded into the seabed between Massachusetts and Virginia over the next seven years. Their approvals are being “streamlined” by BOEM, and that sea of turbines will be bolstered by another 5,000 turbines thereafter. Critics have described Biden’s OSW program as the “industrialization” of the Atlantic Ocean, suggesting it will dramatically change our offshore waters with the possibility of creating multiple environmental issues and potentially putting a meaningful portion of our fishing industry out of business.

    Read the full article on Energy-Musings.com »

  • Energy Musings, August 8, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download PDF

    August 8, 2023

    Aspirational CAFE Policy To Disrupt U.S. Auto Market

    The Transportation Department plans to boost the CAFE standards to levels that will force the auto industry to only build EVs by 2032. The proposed standards will be impossible for automakers to reach without shifting their entire output to EVs, especially after the mpg of EVs are downgraded. GM’s latest financial results highlight the power and profitability of its ICE vehicle franchise. The EV transition will depend on the successful introduction of price-competitive EVs such as Chevrolet’s Equinox EV being introduced this fall. Examining the challenges impacting this transition includes reviewing the latest Anderson Economic Group’s EV versus ICE vehicle fueling cost study. READ MORE

    Aspirational CAFE Policy To Disrupt U.S. Auto Market

    Dreamers in the Transportation Department, under the spell of White House social engineers, unveiled a nearly 700-page plan to boost the Corporate Average Fuel Economy (CAFE) standards for U.S. passenger cars, as well as trucks and SUVs. By 2032, the government wants cars to average 66.4 miles per gallon, up from 44.1 mpg set last year. Trucks and SUVs will need to average 54.4 mpg, up from 32.1 mpg.

    In an additional debilitating move for the auto industry, the Energy Department is proposing to reduce the “miles per gallon equivalent” for electric vehicles (EV). For example, it would cut the rating for Ford Motor Company’s F-150 Lightning from 237 mpg-e to only 67. This means even more EVs will need to be sold if the auto companies are to avoid penalties for failing to meet the government’s CAFE standards.

    The EV became the Obama administration’s ‘golden calf’ and was foisted on the public and auto industry as the solution for global warming. Money for EVs was abundant, and with the help of the United Auto Workers union, became the carrot to drive the transportation industry transition. The stick was handed to the bureaucrats in the Energy, Environment, and Transportation Departments to create ‘aspirational’ standards to ensure EVs’ success regardless of the environmental and economic costs.

    As Obama’s policymakers began implementing their environmental and energy plans, the domestic automobile and electricity industries were targeted. Remember when Obama told the San Francisco Chronicle in an interview during his 2008 presidential campaign:

    “You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

    The policymakers from Obama’s administration are now alive and well and in control of the Biden administration’s environmental policies. Their bureaucratic supporters control the key enforcement agencies and understand the goals and objectives of these policymakers. Thus, we should not be surprised by what the Editorial Board of The Wall Street Journal called “Biden’s Summer Regulatory Onslaught.”

    Read the full article on Energy-Musings.com »

  • Energy Musings, August 2, 2023

    Written by

    Allen Brooks

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    in

    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDF

    August 2, 2023

    Climate Uncertainty And Risks Viewed By Judith Curry

    Curry’s book is a tough read because it forces you to consider how much is unknown and uncertain about climate change science. A controversial climate scientist who was harassed and pressured to resign her tenured professorship and position as chair of the engineering school at Georgia Tech, Curry began to investigate why questioning the science was so unsettling. According to Curry, there are better ways to seek climate change solutions than our current fortress mentality approach. Read the book to understand this critical policy debate that is changing our economy and lives. READ MORE

    Higher Oil Prices Drive Energy Stock Recovery

    The S&P 500 Index sector report for July showed Energy was the top performer. After six months of poor performance in 2023, the rise in oil prices and improving economic outlooks boosting demand helped performance. Crude oil prices reached the highest level since April ($80 per barrel) and the monthly increase matched that of January 2022. Headwinds have become tailwinds and investors may be forced to reconsider their aversion to owning Energy stocks. READ MORE

    Climate Uncertainty And Risks Viewed By Judith Curry

    We just finished reading Judith Curry’s book, Climate Uncertainty And Risks: Rethinking Our Response, which provides a wonderful but challenging journey through the political minefield of climate change science and its policy prescriptions. For those of us who have been researching and writing about climate change – the science, data, and policy recommendations – we noted that the book’s title is suddenly out of date. U.N. Secretary-General António Guterres has just upped the climate rhetoric. The greenhouse effect of the 1980s was overtaken by global warming, which often was described as global heating. Then terminology shifts came quicker going from climate change to the climate crisis, the climate emergency, and now global boiling. What’s next – global vaporization?

    Exhibit 1. Discovering What We Know And Do Not Know

    Source: eBay

    Curry’s new book was published in June. In January, Curry wrote on her blog about the book, its origin and objectives, the peer review process it was subjected to, and the book’s cost. The book was peer reviewed and issued by an academic publisher, Anthem, which wished to expand its ‘Environment and Sustainability Initiative’. Choosing this publisher made for a better volume in Curry’s view because of the peer review process, but it also created a cost problem for the book and its various formats. Imagine an author worried about how an expensive book might limit the reach and impact of her thinking!

    Read the full article on Energy-Musings.com »

  • Energy Musings, July 30, 2023

    Written by

    Allen Brooks

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    Energy Musings contains articles and analyses dealing with important issues and developments within the energy industry, including historical perspective, with potentially significant implications for executives planning their companies’ future.

    Download the PDf

    July 30, 2023

    Climate To Be Stock Market Theme Of The Decade?

    Stocks move up and down based on investor optimism or pessimism about the economy and the earnings power of companies. But investment performance may be impacted by other considerations reflected in decade-long investment themes. From the Go-Go era to gold to Japan, Inc. and the dot.com boom and bust, every decade has had a theme that drove the performance of select stocks or assets. The current decade’s theme may be climate but not climate change. Climate is a ‘big tent’ concept yielding numerous investment opportunities. The reason for the theme may surprise you. READ MORE

    Climate To Be Stock Market Theme Of The Decade?

    Legendary stock market investor, Warren Buffett believes in long-term investing. He has said, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.” That certainly isn’t the mantra of day traders or momentum investors. It isn’t the investment style of most active portfolio managers. In Buffett’s case, he often owns a stock for decades, and in some cases even buys the entire company to add to his Berkshire Hathaway conglomerate.

    If you focus on long-term investing, your portfolio will experience ups and downs as the stock market oscillates through periods of optimism and pessimism about the future of the world’s economy and its impact on company earnings. Stock prices reflect the mood of investors and the earnings power of companies. But other factors impact share prices such as investment themes that drive investors to favor certain types of companies at any point in time.

    We recently listened to a professional wealth manager interview the founder and managing editor of an independent global macro research and trading advisory firm with a focus on major investment themes. During the podcast, he was asked about what investment theme investors should be focused on now. Before answering the question, the strategist reviewed the history of investment themes. His narration covered almost all our investment career. We found his history of decade investment themes insightful as it characterized what was popular at the time and made money for investors until the theme stopped working. Often, investors fail to realize a theme has ended and another has begun, which is what costs them money.

    Exhibit 1. How Stocks, Bonds, And Inflation Performed By Decade

    Source: wealthmeta.com

    Let’s look at the investment themes the strategist identified. To make the review parallel our career, we will begin with the 1960s, a decade the strategist didn’t mention. To understand the theme of the 1960s, we must first understand the 1950s. That market was an extension of the post-World War II boom driven by rapid economic growth as the U.S. transitioned from a war footing to one capitalizing on the many inventions of the late 1930s and during the war, rapidly growing young populations, and rising incomes and improving lifestyles. The public’s inability to spend on goods, cars, appliances, and homes during the 1930s and 1940s led to a buildup of savings which fueled the 1950s economy. But investing during that decade was heavily influenced by the conservative approach of Americans who had lived through the Depression and WW II.

    Read the full article on Energy-Musings.com »

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