Energy Sector

[nafregnum]

Jason Bordoff turns out to be someone I have listened to a number of times on the Columbia Energy Exchange podcast, as he's one of the hosts.  He's definitely not in the same category as the guy who called for nationalizing US oil back in July. 

 

The zerohedge.com article seems to be scaremongering because the title is "Top Dems Urge Biden to Nationalize Oil & Gas Industry" but Tom Nelson was already someone who dropped out of his senate race in July, 3 days after posting his op-ed in captimes.com, a Madison Wisconsin local newspaper.  Not sure that qualifies Tom Nelson as a "Top Dem" ... and Jason Bordoff's talking points were anything but  calls for nationalization.  Tyler Durden and Michael Schellenberger are the authors of the unfounded claims and ought to be ashamed of themselves for writing click bait like that ; )  

 

 

(you have to put an email in to get a free-to-read link, a form of paywall I didn't mind as much as some of the others out there)

 

https://www.foreignaffairs.com/articles/energy/2022-06-07/markets-new-energy-order

 

Including last couple paragraphs:

 

Quote

Also risky are aggressive government efforts to achieve energy security by disconnecting from the global energy economy. Some members of the U.S. Congress, noting that the United States now exports more energy than it imports, advocate curbing U.S. exports of oil and gas in order to meet American energy needs first. Such actions would likely backfire, undermining energy security as well as free trade. Diversifying supply by stimulating domestic production of key commodities can bring benefits, but so too does integration into a well-supplied and flexible energy market. Energy self-sufficiency may seem like a route to security, but it would be highly inefficient and impose unnecessary costs. It would also leave the United States without the necessary global energy linkages to meet demand in the event of a future crisis or dip in U.S. shale production.

 

Finally, governments must avoid inflaming domestic partisan divisions, which in the United States are already deep with regard to the question of the role of government. In the years to come, a growing number of legislative proposals aimed at boosting energy security, smoothing the transition to net-zero emissions, and coping with climate change promise more political flash points and partisan wrangling. American leaders must therefore make a concerted effort to build a bipartisan and broad-based coalition in support of these measures, one that includes everyone from environmentalists to the oil and gas industry. Another coalition of strange bedfellows existed two decades ago, before the shale boom, when the United States imported huge quantities of oil from sometimes unstable regions that posed a national security threat. A broad spectrum of interests, each motivated by different arguments, pulled together then to push the United States to consume less oil. Today, a similar coalition could be built around the need for an integrated strategy that ensures both climate security and energy security.

Europe has called the Russian war in Ukraine its 9/11. The terrorist attacks of that day brought about a new security order that dominated the international landscape for 20 years and is still a dominant feature of world affairs. One legacy of the Ukraine war will be a new energy order, originating in Europe but radiating to the farthest reaches of the global economy. It will be defined by the dual imperatives of energy security and climate action. Pursuing them at the same time, without allowing one to compromise the other, will require harnessing the power of markets. But it will also require a much more expansive role for government to leverage, shape, and steer those markets, correcting the failures thrown into sharp relief by today’s crisis. Without government intervention, tailored and restrained but nonetheless increased, the world will suffer a breakdown in energy security or the worst effects of climate change—or both.

 

Edited October 28, 2022 by nafregnum
I found that Jason Bordoff actually is a podcast host I've listened to...

[james22]

3 hours ago, nafregnum said:

 

This scared the pants off me, so I went to twitter to see if anyone else said/heard this.  Bordoff offers clarification here, saying he's never called for nationalization of the companies.  I'm off to read the Economist article he refers to ...

 

 

 

Thanks. 

 

One wonders if the interpretation was deliberate...

 

[nafregnum]

2 minutes ago, james22 said:

 

Thanks. 

 

One wonders if the interpretation was deliberate...

 

 

Yeah, I'll have to watch out for Michael Schellenberger articles in future and put on my skeptic hat when I do.  Bordoff definitely isn't calling for nationalization, a fact which Schellenberger could easily have verified if he cared to ask around.  That's just the wild west we get from substack journalists I guess.

[james22]

My research and observations lead me to believe that there is the potential for traditional energy to break out of its boom-bust cycle, at least for an investable period of time.

 

https://www.mauldineconomics.com/frontlinethoughts/turning-bullish-on-energy#disqus_thread

[Dalal.Holdings]

President fails to confront his glaring failures on Energy Policy:

 

 

 

 

Meanwhile, CEO of XOM:

“There has been discussion in the U.S. about our industry returning some of our profits directly to the American people. In fact, that’s exactly what we’re doing in the form of our quarterly dividend.”

[Spekulatius]

The energy industry is playing with fire here taunting Potus. It makes no sense from a business perspective. There is only downside from doing this. They should lay low and collect their cash or make some sensible proposals to solve the NG shortage in Europe etc.

What do you think will happen when Republicans get into power and energy prices stay high, which you I think is quite likely outcome. Who then will be blamed? What will happen next?

Edited October 30, 2022 by Spekulatius

[james22]

LOL, there's NO downside.

[SharperDingaan]

1 hour ago, james22 said:

LOL, there's NO downside.

 

Agreed. The Republicans only need to flip one seat for a senate majority, and will very likely flip more than that. Shortly thereafter, US drilling opens up again with new production either forcing down WTI  or refilling the SPR. Incremental Canadian heavy desulphated, and transported by rail, in whatever quantities are available.

 

If the Democrats are to to retain power in 2 years, they will need to make material changes right after the mid-terms. Implementation of friend-shoring components of the Freeland doctrine. 

https://policyoptions.irpp.org/magazines/october-2022/canada-us-security-doctrine/

 

Not a bad thing.

 

SD

Edited October 30, 2022 by SharperDingaan

[lnofeisone]

Probably related to our last few posts. Looks like the energy companies are stepping up their PR game just in time before the elections. In the last few weeks I've heard a lot of commercials on the radio and billboard from companies that have no business advertising to general public highlighting energy affordability and reliability. For example, energy transfer, enbridge, Philips 66 on the radio. There is a huge poster right on north capitol st ne, a mile north of the capitol with tellurian advertisement. I asked people I'm with I'd they know any of these concerns and the answer I almost always a resounding no. Also, nobody in DC would ever be a direct consumer of any of these. 

[Pelagic]

Some good insight into the death spiral of Venezuelan production in this article. 

 

https://www.reuters.com/business/energy/venezuelas-oil-partners-head-exit-forgoing-unpaid-debt-2022-10-27/

[Dalal.Holdings]

https://www.bloomberg.com/news/articles/2022-10-31/biden-to-call-on-congress-to-consider-windfall-tax-on-oil-companies?srnd=premium

 

Quote

President Joe Biden will call on Congress to consider tax penalties for oil and gas companies accruing record profits, according to a White House official, amid stubbornly high gasoline prices that are dragging on Democrats’ midterm prospects.  

 

This guy is just plain stupid.

[Xerxes]

I am listening to Biden speech live, it was very short one, and even I, more or less a liberal, consider this speech an absurdity and idiotic.  

The first & only question that was asked was about Lula and president election, no one bothered with question on oil

[Gregmal]

"War profiteering"! LOL

 

So you provoke a war between a corrupt but otherwise meaningless country and another nation we routinely hate on for political brownie points, and voila now we can blame "war" for inflation and high energy prices. This is legendarily brilliant. 

Edited October 31, 2022 by Gregmal

[Sweet]

1 hour ago, Gregmal said:

"War profiteering"! LOL

 

So you provoke a war between a corrupt but otherwise meaningless country and another nation we routinely hate on for political brownie points, and voila now we can blame "war" for inflation and high energy prices. This is legendarily brilliant. 

It’s transparent and cynical politicking, but don’t think we can make the claim that Biden provoked a war.

[Gregmal]

Just look at what we re doing now in Taiwan. Then wait a few years for it to build up and same thing happens all over again but people can pretend we had nothing to do with it. 

[Sweet]

Taiwan long predates Biden, it’s a continuation of decades long policy.

 

Don’t think anyone could claim we have nothing to do with either Taiwan or Ukraine.

 

Just can’t see how it’s provoking.

[Gregmal]

It’s been a joint bipartisan effort getting here, but since it officially started in February, all the stupid sanctions and constant stream of money going over there…both Biden’s doing, have done nothing but make the bull case for energy better. This doesn’t even include the constant barrage of inflammatory remarks and rhetoric. Then add in the disastrous energy policies at home. The Big Guy is really delivering for anyone long energy. 

[Ulti]

13 hours ago, Gregmal said:

It’s been a joint bipartisan effort getting here,

Your preaching to the choir.......Last saw that with voting down Munchin's pipeline bill (by both sides )https://news.yahoo.com/joe-manchin-suffers-big-loss-213812611.html

Since I currently have a few large concentrated energy positions, I have a tendency to consume "data driven " (haha) info....I watched

He gives a long  data oriented presentation \360ish slides on demand ,supply, and all things oil. World view but his investment focus is on Canadian energy.

He recommends some 15 minute recaps but since I'm old and dense.......

[lnofeisone]

7 hours?!?!?!? I like his data-focus but always bucket him as "top range" of the valuation spectrum. Wasn't he the one that thought VET will be at least $50 by DEC and worth $100 or so. I'm a seller at $35-40. 

[Pelagic]

1 hour ago, lnofeisone said:

7 hours?!?!?!? I like his data-focus but always bucket him as "top range" of the valuation spectrum. Wasn't he the one that thought VET will be at least $50 by DEC and worth $100 or so. I'm a seller at $35-40. 

 

I think his VET target is north of $140 actually lol

 

Interesting that his personal portfolio is 50% ITM VET calls and he owns no VET in the White Tundra portfolio.

 

https://www.whitetundra.ca/pricetargets

[lnofeisone]

10 minutes ago, Pelagic said:

 

I think his VET target is north of $140 actually lol

 

Interesting that his personal portfolio is 50% ITM VET calls and he owns no VET in the White Tundra portfolio.

 

https://www.whitetundra.ca/pricetargets

I would certainly not oppose it if someone could swoop in and buy it out at $100/share.  Realistically, I think it will be a slow and steady grind and maybe we get to $40 but the rest will be driven by NBP/TTF. Too much of VET's earnings is beholden to it. 

[Ulti]

1 hour ago, lnofeisone said:

as "top range" of the valuation spectrum. Wasn't he the one that thought VET will be at least $50 by DEC and worth $100 or so. I'm a seller at $35-40. 

Totally agree…. However I do like this

presentation ( and watched it in several sections)…. Basically showed worldwide increased demand and flatline shrinking supplies in great detail….. emphasis on how the Permian is declining by going thru company by company..As I said he does have 15-45 minutes synopsis 

 

My issue, which I mentioned in a previous thread, is I sometimes feel like I’m in an echo chamber listening to

Kuppy, doomberg odd lots white tundra Columbia energy exchange etc…all variations of the same theme… makes me wonder what I’m missing….

As far as VET….. I did not invest because of him and his very optimistic outlook …. I was looking for a 100000

producer with European exposure and listed on a us stock exchange…. As long as they are following a disciplined approach of creating a pristine balance sheet, return of capital to shareholders ,excellent reserves etc… I’ll hold…. Hopefully VET will turn into a company (on a much smaller basis)something similar to CTRA

[Ulti]

11 hours ago, Pelagic said:

north of $140

I think his model works in a sliding scale depending on the price of O&G

https://podcasts.apple.com/us/podcast/columbia-energy-exchange/id1081481629?i=1000584701043

comprehensive look at Euro energy outlook over the next few years…. Looking forward to hearing VET’s outlook soon

[Pelagic]

8 hours ago, Ulti said:

I think his model works in a sliding scale depending on the price of O&G

https://podcasts.apple.com/us/podcast/columbia-energy-exchange/id1081481629?i=1000584701043

comprehensive look at Euro energy outlook over the next few years…. Looking forward to hearing VET’s outlook soon

 

I think he's using strip pricing in his model for European gas since even at relatively low WTI/AECO prices of $70/4.5 he has VET at $138. Would also explain why VET is kind of an outlier on his price targets sheet relative to current price since Euro gas affects it a lot more than the other Canadians he covers.

 

Thanks for the podcast link, it was quite informative. 

 

[Ulti]

Agree about the podcast ;Columbia energy exchange usually provides good info

( though I'm old ,deaf and have a difficult time with thick French accents haha)