C.O.B. Tuesday

We are excited to share this Special Edition featuring Julie Kozeracki, Acting Chief Investment Officer for the U.S. Department of Energy’s Office of Energy Dominance Financing (EDF), for a wide-ranging look at the effort to accelerate nuclear power deployment in the U.S. Julie previously served as a Senior Advisor to the office under the Biden Administration and as a Principal with Boston Consulting Group. EDF has over $250 billion in loan authority available to help deploy high-impact energy infrastructure projects. We were thrilled to hear Julie’s latest insights on EDF’s activities, recent announcements, and the opportunities and challenges ahead for nuclear development in the U.S.
 
In our conversation, we discuss the renewed push to accelerate nuclear power in the U.S. and the increasingly important role of EDF. Julie shares her perspective on nuclear’s bipartisan appeal and its ability to support affordability, reliability, energy security, and lower emissions. We explore how EDF’s approach has evolved, including its expanded financing authorities and increased focus on nuclear, as well as the Administration’s goals of having 10 large reactors with complete designs under construction by 2030 and adding 5 GW of uprates to the existing nuclear fleet.
 
We examine the economics and financing of new nuclear, including EDF’s $17.5 billion program to procure long-lead items for 10 AP1000 reactors and the benefits of standardization, supply-chain investment, and accelerating project timelines. Julie discusses growing interest from utilities and independent power producers, lessons learned from Vogtle Units 3 and 4, and why she believes the risk profile for future AP1000 projects is fundamentally different. We also explore how investors and equity analysts view new nuclear projects and how federal financing, investment tax credits, improved risk sharing, and hyperscaler power purchase agreements could help address concerns around cost and risk. Julie shares her perspective on the different approaches of regulated utilities and IPPs, the potential for build-own-transfer structures, and how growing power demand from AI and data centers could create new opportunities for nuclear development.
 
We discuss the significant near-term opportunity to increase generation from the existing nuclear fleet through power uprates and life extensions, including the potential to extend reactors from 60 to 80 years of operation and potentially longer. More broadly, Julie discusses the importance of baseload and dispatchable generation as electricity demand grows, changing attitudes toward nuclear at the federal, state, and local levels, and the role of existing nuclear sites in supporting future development. We close by discussing what will be required to execute at scale, including strengthening the domestic nuclear supply chain, investing in advanced manufacturing and technologies, and developing the skilled workforce of welders, pipefitters, electricians, and other trades needed to support a new generation of nuclear projects. It was a fascinating discussion and we look forward to staying in touch with Julie.
 
To start the show, Mike Bradley highlighted that markets remain focused on interest rates and inflation. Wednesday’s PCE inflation report came in below expectations, with headline PCE at ~3.4% and core PCE at ~3.0%, helping push interest rates modestly lower and equity markets higher. Mike noted that while another Fed rate hike this year may still be on the table, the softer reading could reduce expectations for further increases.
 
Turning to oil markets, Mike noted that oil prices have declined ~$8–$10/bbl over the past two weeks as crude flows through the Strait of Hormuz have increased and Saudi Arabia’s East-West Pipeline has resumed operations at ~3–4mmbpd. He also discussed the potential for a U.S. diesel export ban and highlighted lower diesel prices as an important factor in easing inflation concerns and improving broader economic sentiment. Veriten Managing Director Nick Morriss also joined the discussion and peppered in his nuclear and power questions and perspectives.

We were thrilled to host our good friend Scott Sheffield in advance of his new book, From Tehran to the Permian: Leading the Shale Revolution and My Fight for Energy Independence, publishing on October 6th. Scott’s career spans more than four decades, including serving as CEO of Parker & Parsley and later Pioneer Natural Resources, where he helped lead the company through multiple industry cycles and played an important role in the development of the Permian Basin and the U.S. shale revolution. Scott’s new book traces that journey from his formative years living in Tehran through his decades in the energy industry, sharing the leadership lessons, challenges, and experiences that shaped him along the way. We were honored to host Scott and hear his reflections on his career and his latest perspectives across the energy landscape.
 
In our conversation, we cover the many lessons and experiences captured in From Tehran to the Permian. Scott shares his perspective on culture and leadership, including his emphasis on mutual respect, accountability, efficiency, and maintaining a family feel as Pioneer grew. He reflects on navigating multiple industry downturns, the importance of maintaining low leverage and financial flexibility, building strong management teams and boards, and learning to listen and empower others. We discuss Pioneer’s evolution from its roots in the Spraberry to international exploration and ultimately back to the Permian, as well as Scott’s willingness to change strategy as markets and opportunities evolved.
 
We explore the evolution of the broader oil and gas industry, including the maturation of U.S. shale, the opportunities and challenges of international exploration, Scott’s long history with Australia and the Beetaloo Basin, and his perspectives on shareholder activism, capital discipline, industry consolidation, and the future of public versus private independents. Scott also reflects on his experiences in Iran and shares his perspectives on Iran and Venezuela, as well as his experience with the FTC following ExxonMobil’s acquisition of Pioneer.
 
We touch on today’s energy landscape, including Scott’s role in helping lift the U.S. crude oil export ban in 2015, his thoughts on the potential implications of restricting diesel exports, and the importance of natural gas infrastructure as power demand grows. Scott also shares observations from his time on the Williams board and the increasingly important intersection of natural gas, power generation, LNG, AI, and data centers. Throughout the conversation, we return to many of the themes that define Scott’s career and book: culture, adaptability, financial discipline, great people, and a willingness to listen and evolve.
 
To start the show, Mike Bradley highlighted Pioneer Natural Resources’ impressive long-term value creation, from its formation in 1997 through its acquisition by ExxonMobil in 2024. Turning to fixed income, he noted that Treasury yields moved higher this week, with the 10-year Treasury yield rising ~10 basis points to ~5.3%, near a 25-year high. Investors are now focused on Wednesday’s PCE Price Index report, with a stronger-than-expected reading potentially reinforcing expectations for additional rate hikes.
 
WTI is trading at ~$89/bbl, down ~$4/bbl this week and ~$11/bbl over the past two weeks, driven in part by continued oil flows through the Strait of Hormuz and the restart of Saudi Arabia’s East-West Pipeline, restoring ~3mmbpd of capacity. Mike noted that a key uncertainty for refined product markets remains whether the Trump Administration will move forward with a temporary diesel export ban.
 
In equities, the DJIA and S&P 500 are both down ~1% this week. With the third quarter drawing to a close, Mike highlighted a significant divergence in sector performance, with Energy up ~15% for the quarter while Utilities declined ~15%. Looking ahead, he noted that further moderation in crude oil and diesel prices could ease inflationary pressures, help stabilize interest rates, and provide a more constructive backdrop for equity markets. Arjun Murti also joined and reflected on knowing Scott from their first meeting during Arjun’s time at Goldman Sachs to their more recent work together at Columbia University’s Center on Global Energy Policy.

Today we had the exciting opportunity to tour Caliche’s Golden Triangle Storage facility in Beaumont, Texas. Caliche is an acquisition and development company focused on the underground storage of natural gas and industrial gases, including hydrogen and helium, as well as carbon sequestration. Following the tour, we sat down with Dave Marchese, CEO of Caliche. Dave has over 25 years of experience in the development, construction, and operation of energy assets, including underground hydrocarbon storage, utility-scale power plants, and petrochemical facilities. We were thrilled to hear Dave’s perspective on the natural gas storage business, the growing importance of storage to LNG and power markets, and the infrastructure needed to support rising U.S. natural gas demand.
 
In our conversation, Dave walks us through the natural gas storage business and why storage is becoming increasingly important as U.S. natural gas demand grows and the energy system becomes more complex. We discuss Caliche’s platform, including Golden Triangle Storage in Beaumont and Central Valley Gas Storage in California, and spend time on the fundamentals of salt cavern and reservoir storage, how storage facilities are developed, and the significant permitting, capital, and contracting requirements involved. Dave shares the history of the storage market, including the industry’s last major buildout, the impact of the shale revolution, and why relatively little new storage capacity has been developed over the past 15 years.
 
We explore what is driving renewed demand for storage today. Dave discusses the increasingly important role storage plays for LNG terminals, including managing large volumes of gas during outages and normal operating fluctuations, as well as its role in supporting gas-fired power generation and balancing an electric grid with growing amounts of intermittent renewable generation. We touch on AI and data center-driven power demand, the potential implications for natural gas infrastructure, and why firm transportation and storage could become increasingly important as that load develops.
 
We also discuss the broader infrastructure picture, including storage needs in West Texas and the Northeast, constraints on moving gas between Texas and Louisiana, permitting and regulatory considerations, and Caliche’s plans to significantly expand both of its existing facilities. Dave shares his perspective on the growing competition for skilled workers across the industrial economy, the importance of investing in and training the next generation of energy professionals, and more. It was a fascinating discussion and a great opportunity to better understand a critical but often underappreciated piece of the natural gas and broader energy infrastructure system.
 
Mike Bradley opened the discussion by highlighting that market conditions were considerably calmer this week after several consecutive weeks of elevated volatility. In fixed income markets, the benchmark 10-year Treasury yield has pulled back this week to approximately 4.95% following last week's move above the psychologically important 5.0% threshold. Turning to oil markets, WTI crude oil prices have plunged this week to approximately $95 per barrel, down from roughly $103 per barrel at last week's close. The sharp decline was driven primarily by reports that Saudi Arabia's East-West pipeline system, which has a capacity of roughly 5 million barrels per day, could soon resume operations.
 
Turning to equities, he highlighted that a combination of lower interest rates, declining oil prices, and easing concerns surrounding AI-related risks appeared to provide a more constructive backdrop for broader equity markets this week. Mike flagged that President Trump's address to the United Nations as well as President Xi Jinping's upcoming visit to the United States on September 24 could emerge as important market catalysts in the week ahead. Investors will be closely monitoring discussions surrounding artificial intelligence, trade relations, and the ongoing conflict involving Iran, as developments in any of these areas could have meaningful implications for global equity, commodity, and currency markets.

As you may know, Gastech is currently underway in Bangkok, Thailand. To help us get a sense of the on-the-ground takeaways and sentiment, we had the pleasure of hosting our good friend Martin Houston. Martin is a longtime energy industry leader with decades of global experience. He currently serves as Chairman of Omega Oil and Gas, a Non-Executive Director of Energean, BUPA Arabia, CC Energy, and Singapore GasCo, and a Senior Advisor at Moelis & Company. Martin previously co-founded Tellurian, where he served as Executive Chairman until the company’s sale in 2024, and spent 32 years at BG Group, serving as Chief Operating Officer and Executive Director. Mark Castiglione is also attending Gastech and joined us for today’s session. We were thrilled to host Martin and hear his perspectives on the global natural gas and LNG outlook, Asia’s growing energy needs, and beyond.
 
In our conversation, Martin and Mark share key themes emerging from Gastech, including energy security, affordability, and reliability, Asia’s role as the primary engine of global energy demand growth, and a more pragmatic approach to decarbonization. They discuss how Asian policymakers and industry leaders are focused on securing the affordable and reliable energy needed to support economic growth and rising power demand. We explore the global natural gas and LNG outlook, the growing importance of resilience and diversity of supply, the push to advance new U.S. FIDs, and the potential for continued demand growth in increasingly price-sensitive markets such as China.
 
We examine the intersection of energy and geopolitics, including growing government intervention in energy markets, the possibility of Russian natural gas eventually returning to Europe, U.S. natural gas resource depth, and significant gas development opportunities in Australia and Indonesia. We discuss ASEAN grid connectivity and the region’s increasing focus on energy diversification and cooperation, Iran and the Strait of Hormuz, European gas storage levels, and potential surprises for global energy markets. Martin highlights growing investment in infrastructure “workarounds” to the Strait that could reshape regional energy flows and expresses optimism that global natural gas demand and supply could ultimately surprise to the upside, despite continued geopolitical uncertainty and volatility. We greatly appreciate Martin for joining us during a very busy week in Bangkok.
 
In our upfront discussion, Mike Bradley noted that the primary themes in our lead-ins over the past several weeks have been elevated U.S. interest rates, heightened volatility in global oil markets, and below-average European natural gas storage levels. This week, however, another risk entered the spotlight: the AI-driven market scare, which has contributed to increased volatility and negatively impacted U.S. equity markets. In fixed income, the 10-year Treasury yield pushed above 5% for the first time since 2007. Markets are focused on Wednesday’s FOMC meeting, with a 25-basis-point rate increase broadly expected and investors watching Chairman Warsh’s comments for signals on inflation and further hikes.
 
In energy, WTI rose to ~$103–$104/bbl, partly reflecting damage to Saudi Arabia’s ~5 MMBpd East-West pipeline system. U.S. retail diesel prices have climbed to ~$6.25/gal, fueling debate over potential export restrictions. European natural gas prices also rose to ~$28/MMBtu, up ~200% year-to-date, as concerns persist over rebuilding storage ahead of winter. Mike wrapped by highlighting growing AI-related concerns, which contributed to a ~500-point decline in the DJIA. Recent comments from Anthropic’s CEO have raised questions in the minds of investors about the longer-term growth trajectory of the Mag 7 and the industrial, utility, and energy companies benefiting from the AI infrastructure build-out.
 
We hope you all enjoy the discussion as much as we did. Thanks again to Martin for joining and our best to you all!

Today marks 25 years since September 11, 2001. We wanted to do our part to remember the lives lost, the extraordinary heroism of that day, and the very best of humanity that emerged amid unimaginable tragedy. For this Special Edition COBT, we sat down with three longtime friends, David Trice, Terry Rathert, and Steve Campbell, to remember the events of that morning and reflect on an experience we shared firsthand. On the morning of September 11, 2001, we were having breakfast together at the Marriott World Trade Center, located between and connected to the North and South Towers, when the first plane struck.
 
In our conversation, we retrace the morning as we remember it: the first moments inside the Marriott, our exit south from the World Trade Center complex toward Battery Park, the collapse of the towers, becoming separated, and eventually finding our way out of Manhattan. We reflect on the instinctive decisions made in moments of extraordinary uncertainty, the courage of first responders moving toward danger, and the countless acts of kindness we witnessed from strangers throughout the day.
 
We also discuss how September 11 changed the way we thought about risk, safety, travel, and the world around us. Twenty-five years later, our memories remain remarkably vivid. We believe remembering and sharing these stories matters – not only to honor those who were lost, but also to remember the courage, generosity, and humanity that so many people showed that day. We are deeply grateful to David, Terry, and Steve for joining us for such a personal conversation and for allowing us to share our memories with the COBT community.
 
This was perhaps the most unique episode in COBT’s history. We hope you find the discussion meaningful and that it contributes in some small way to your own remembrance of the day.
 
We Will Never Forget.

Today we had the pleasure of hosting Dr. Judah Cohen for a discussion focused on weather. Judah is a Director of Seasonal Forecasting at JANUS Research Group and a Research Scientist at the Massachusetts Institute of Technology. His work focuses on sub-seasonal to seasonal weather forecasting, with particular expertise in the polar vortex, Arctic climate variability, and the factors that drive winter weather across North America and Europe. We were excited to hear Judah’s perspective on the upcoming season, the evolution of weather forecasting, and how new technologies including AI could improve our ability to predict weather further into the future.
 
In our conversation, we explore the evolution of weather forecasting and Dr. Cohen’s career studying sub-seasonal to seasonal weather patterns, including the industry’s progression from historical analogs and statistical methods to increasingly sophisticated physics-based models. We discuss how satellite observations and expanded global datasets have improved our understanding of the atmosphere, as well as the limitations of historical weather data and where today’s models continue to struggle, particularly beyond the traditional one- to two-week forecasting window. Dr. Cohen shared his perspective on the growing role of AI in weather forecasting, the strengths and limitations of current dynamical models, and why better modeling of the interactions between the troposphere, polar vortex, and jet stream could meaningfully improve longer-range forecasts. We also discuss the respective roles of academia, government forecasting centers, and private-sector companies in advancing the next generation of weather modeling.
 
We examine upcoming winter outlooks and the implications of a potentially historic “Super El Niño.” Dr. Cohen explains why El Niño’s influence on winter weather is not necessarily linear and cautioned against assuming that an exceptionally strong El Niño guarantees an exceptionally warm winter. We explore his research linking Siberian snow cover to disruptions of the polar vortex and colder conditions in eastern North America as well as the potential for episodic cold and snow even during an otherwise mild winter. We cover the outlook for Europe, where natural gas storage levels make winter weather particularly consequential, and the difficulty of using El Niño alone to reliably forecast European conditions. We also touch on how an unexpected, multi-week cold snap could materially affect natural gas demand and prices, highlighting the significant implications of improving weather forecasting for energy markets and preparedness for extreme winter events.
 
Mike Bradley opened the discussion by noting that the Dow Jones Industrial Average (DJIA) fell ~600 points this week as investors grappled with higher oil prices and rising U.S. bond yields. The 10-year Treasury yield climbed to ~4.8%, while the 30-year reached ~5.25%. With August CPI and PPI reports due later this week, Mike noted that inflation data could play an important role in shaping interest rate policy at the Sept. 16 FOMC meeting. Turning to energy markets, WTI crude oil increased ~$2/bbl to ~$94/bbl amid renewed U.S.-Iran tensions, with reports of potential explosions on Kharg Island, Iran’s primary oil export terminal. European natural gas prices also continued higher, reaching ~$26–$27/MMBtu and bringing year-to-date gains to ~180%, as concerns grow over Europe’s ability to replenish storage ahead of the winter heating season.
 
Mike wrapped by highlighting the Barclays Energy-Power Conference in New York City, which he is attending this week. Based on his initial meetings, he noted a more constructive tone among companies and investors, with growing optimism around the energy and power outlook into 2027. Veriten Senior Advisor Deborah Byers also joined and added her perspectives and questions throughout the conversation.

Today we had the pleasure of hosting Todd Abbott, Chief Executive Officer of Tamboran Resources, and Dick Stoneburner, Chairman of Tamboran's Board, for a conversation recorded on location in Daly Waters, Northern Territory, Australia, a town of roughly 55 people. Tamboran holds approximately 2.8 million net acres across the Beetaloo Basin, and Todd estimates the basin contains roughly 200 Tcf of recoverable gas, enough to support 5 to 6 Bcf per day for a century. The company is dual-listed on the Australian Securities Exchange and the New York Stock Exchange. We recorded on Tuesday morning Australia time this week as part of the company’s first gas celebration at the Shenandoah 2 pad.
 
In our conversation, Todd explains why a resource of this scale and duration is unique globally, in a region with rising demand and declining domestic supply, and in a country that has supplied LNG to Asia since 1989. He describes the Northern Territory as the most supportive regulatory regime he has worked with, including Texas, with a high bar on standards paired with real support in clearing them. We explore Tamboran's various strategic partnerships, including Liberty Energy, Helmerich & Payne, and Baker Hughes, all of which are investors in the company. We also discuss INPEX's recent farm-in to the Daly Waters joint venture. Todd covers the company’s cost structure in the field and also discusses gas prices which are roughly three times U.S. levels. As we wrapped up with Todd, we touch on the growing inbound interest from multinationals to Asian gas utilities, and his view that timing, not geology, is the biggest uncertainty he cannot control. A theme throughout the discussion with Todd was his comparison of this new shale development to others he has seen in his 25-year career.
 
Dick then takes us under the hood on the subsurface. At roughly 1.4 billion years old, the Beetaloo is the oldest petroleum system in the world, deposited when only a single life form existed, leaving 150 meters of continuous thermogenic shale from that one organism type. He describes petrophysical characteristics most comparable to the Marcellus and superior to it in many areas, and early well behavior that appears genuinely different, including one well on incline at the tail end of a 90-day test with no surface changes. He also walks us through how Tamboran found the over pressured areas, moving 60 miles south into the deepest part of the basin. We close with well spacing at Shenandoah 2, the beneficial use of gas allowance that lets Tamboran produce ahead of a formal production license, and the milestones Dick is watching, principally the first real decline curves and the testing of additional landing zones. Dick has been involved with the company since 2014 and, as a result, offers a phenomenal historical perspective.
 
Mike Bradley opened the discussion by noting that Treasury yields moved higher across the curve this week, with the 10-year Treasury yield rising to 4.8% and the 30-year Treasury yield exceeding 5.25%. The increase in yields was driven primarily by Federal Reserve Chairman Kevin Warsh's more hawkish tone at last week's Jackson Hole Economic Symposium, which prompted investors to scale back expectations for future interest rate cuts. Turning to the broader equity market, he highlighted that the S&P 500 declined ~1% this week, pressured by higher oil prices and rising bond yields. With second-quarter earnings season largely in the rearview mirror, investor attention is increasingly shifting toward the September 16 FOMC meeting and the upcoming U.S. midterm elections.
 
Turning to oil markets, WTI crude oil prices increased ~$6/bbl (to ~$90/bbl) this week amid renewed conflict between the U.S. and Iran. Mike noted that the biggest development in the oil market this week was the announcement of a 65-billion-barrel oil agreement between the U.S. and Venezuela. Turning to natural gas, European prices continued to move higher this week, reaching ~$25/MMBtu (up over 165% year-to-date). The primary driver remains concern over whether European storage inventories can be replenished to "minimum" required levels before the start of the winter heating season in November. The energy sector advanced ~3% this week, supported primarily by stronger crude oil prices. Mike noted that M&A and strategic deals were a major theme across the energy and electricity complex, with four significant deals/transactions announced this week: SLB's acquisition of Kelvion for ~$4.0 billion; ONEOK's acquisition of Brazos Midstream for ~$4.4 billion; Comstock Resources' $1.65 billion cash transaction with SOCAR; and Fervo Energy's 396-megawatt power purchase agreement (PPA) with Google.
 
Mark Castiglione also joined the conversation, and with the help of Albert De La Portilla, he will be spending roughly a week in the Beetaloo basin understanding all the aspects of the play. The Tamboran team could not have been better hosts, and we sincerely appreciate this opportunity.

Today we had the pleasure of hosting Erin Price-Wright, General Partner in American Dynamism at Andreessen Horowitz (a16z). Erin joined a16z from Index Ventures in 2024, where she was a Partner focused on software infrastructure and applied AI. She previously served as Head of Product for Palantir’s data analytics and machine learning program. The American Dynamism practice invests in founders and companies that support the national interest spanning aerospace, defense, public safety, education, housing, supply chain, industrials, and manufacturing. We were thrilled to hear Erin’s perspective on the rapidly evolving intersection of AI, energy, and industrial technology.
 
In our conversation, Erin shares the story behind a16z’s American Dynamism practice and its early investments in companies including SpaceX, Anduril, Applied Intuition, Shield AI, and Skydio. She discusses how the firm’s conviction in the space developed well before the recent surge of interest in industrial technology. We explore the convergence of AI, supply chain vulnerabilities, geopolitical pressures, reindustrialization, and skilled labor shortages, which Erin believes are creating the conditions for the “next great American industrial build-out.”
 
We discuss physical AI and robotics, the potential to automate dangerous, expensive, and labor-intensive activities across energy and industrial operations, the challenges of deploying physical AI, and the importance of taking a practical approach to automation by starting with specific activities where the economics make sense and expanding from there. We touch on why venture capital is returning to energy and industrial technology, China’s advantage in deployment versus the U.S.’s strength in experimentation and entrepreneurship, and the importance of permitting and regulatory certainty.
 
We also examine data centers and the broader question of whether America wants to build, Erin’s thoughts for energy and industrial leaders looking to accelerate innovation within their organizations, and much more. Special thanks to Erin for joining! We look forward to partnering with a16z on our upcoming Energy & Industrial Technology Showcase in Houston on September 10.
 
Mike Bradley kicked off the discussion by noting that the 10-year U.S. Treasury yield was trading at ~4.65%, down ~10bps on the week but still near its highest level of the year. Bond investors are focused on the ongoing Canada tariff dispute, Wednesday’s Core PCE inflation report, and Chairman Warsh’s Jackson Hole speech on Friday. Major equity indices finished lower last week but are modestly higher this week, with attention now centered on NVIDIA’s second-quarter earnings report Wednesday and its 6- to 12-month capital spending outlook.
 
Turning to energy markets, Mike highlighted that WTI crude oil had declined ~$5/bbl this week to ~$82/bbl following the Treasury Secretary’s announcement of “Operation Economic Outcast,” aimed at increasing economic pressure on Iran. EU natural gas prices rose another ~$1/MMBtu to ~$23/MMBtu, with storage levels remaining a concern ahead of winter. The energy sector was modestly lower this week but remains up ~5% month-to-date, led by refiners (+~12%). In power, electric utilities are down ~5% month-to-date, while IPPs, large-scale generators, and distributed generation providers are down ~10%–15% on average, largely reflecting higher interest rates and growing state-level opposition to data center development.

Continuing our California COBT Series, we are excited to share this Special Edition featuring PBF Energy. We had the pleasure of touring PBF’s 700-acre Torrance Refinery and met with Jared Wimberley, Refinery Manager. The facility has a nameplate crude capacity of 166,000 barrels per day and a Nelson Complexity Index of 13.8. It produces approximately 1.8 billion gallons of gasoline annually, representing roughly 10 percent of California’s gasoline demand. In addition to blending three grades of gasoline, the refinery produces diesel fuel, jet fuel, liquefied petroleum gases, coke, and sulfur. We were thrilled to visit the facility, meet members of the team, and see firsthand the scale and complexity behind a critical piece of California’s energy infrastructure.
 
In our conversation, Jared highlights the critical role the Torrance Refinery plays in California’s energy system, economy, and local community. We discuss the refinery’s nearly century-long history, its significant economic impact and high-quality jobs, the complexity and safety of modern refinery operations, and the importance of maintaining strong relationships with the City of Torrance and surrounding community. Jared shares his perspective on California’s challenging refining environment, including high power and operating costs, regulatory complexity, access to California crude, workforce development, and the implications of declining in-state refining capacity.
 
We explore the connection between reliable local energy production and affordability, including how energy costs ripple through the broader economy, from transportation and manufacturing to groceries and other everyday goods. California’s economy continues to depend on gasoline, diesel, jet fuel, electricity, and petroleum-derived materials, making the future of refining an important part of the broader conversation around the state’s competitiveness, energy security, and cost of living. We close with Jared’s perspective on the opportunity for California to balance its environmental goals with the need for reliable, affordable energy and a strong economy.
 

We are thrilled to share this Special Edition COBT. Continuing our California Series, we had the opportunity to tour the Diablo Canyon Power Plant and sit down with Maureen Zawalick, Senior Vice President and Chief Risk Officer at PG&E Corporation, and Matt Crozat, Executive Director of Strategy and Policy Development at the Nuclear Energy Institute (NEI). Our visit was particularly timely as the U.S. Department of Energy recently awarded PG&E $271 million to support extended operations at Diablo Canyon, while Governor Gavin Newsom recently indicated he would leave the decision on extending the plant beyond 2030 to the next administration. Diablo Canyon produces nearly 10% of California’s electricity and is the state’s only operating nuclear power plant.
 
In our conversation, we explore Diablo Canyon’s history and critical role in California’s power system, the remarkable shift from plans to close the plant to extending its operating life, and how rising electricity demand, electrification, AI, and data centers are reshaping the state’s energy outlook. We discuss the broader nuclear renaissance, the importance of preserving and investing in existing nuclear plants, and the role nuclear power plays in providing affordable, reliable power and grid stability.
 
We cover the regulatory path for Diablo Canyon beyond 2030, the benefits of long-term planning for workforce retention and uranium procurement, and the plant’s impact on electricity affordability. Maureen shares PG&E’s approach to safety and risk management, including seismic safety, water use and environmental stewardship, wildfire, cyber, AI, and the importance of culture and processes in managing risk. We discuss Diablo Canyon’s relationship with the surrounding community and the importance of public engagement and outreach.
 
We end by looking ahead to new nuclear technologies and SMRs, changing attitudes toward nuclear energy at both the state and federal levels, California’s nuclear moratorium, and the need for durable, long-term energy policy. We also discuss the connection between affordable and reliable electricity, manufacturing, economic competitiveness, and where businesses ultimately choose to invest and grow. It was a fascinating discussion and an incredible opportunity to see Diablo Canyon firsthand.