#hottakeoftheday

While I occasionally disagree with Tisha, I always enjoy her perspective on ESG and the energy future so this week, after a two year (or 14 day, depending on how you feel about the curve flattening), I welcome Tisha back to the podcast.

Here is a recent post of hers.

The Pendulum Train

I’m working on my next book, so occasionally I’m going to share my thinking here and on the Energy Thinks podcast to give you a preview and get your thoughts.

Ever since Russia invaded Ukraine, many energy observers have predicted that the renewed global focus on energy security means the global focus on climate change is over. My view is very different: I look at this moment as an opportunity for oil and gas leadership to respond to a range of social and financial pressures for cleaner energy — pressures that will only intensify. (We reviewed this dynamic in a recent Both True, The World’s Cleanest Oil & Gas on Stage.)

But while I disagree with those many energy observers on how to respond to this moment, we share at least this judgment: Politics moves like a pendulum. Below, I explore why I believe in and value the political pendulum swing — and also why I don’t think that this moment represents the end of the public focus on climate. Concern about climate isn’t a pendulum. It’s a train — and it’s not coming back.

A Pendulum or Directional Change?

Many reasonable people can (but don’t) agree that the energy-environmental pendulum has swung too far in the address-climate-at-all-costs direction. I certainly do. In a world with a lot of global challenges and priorities, the climate-apocalypse narrative certainly doesn’t work for all of us — not even a climate hawk like me.

Yet that doesn’t mean that the pendulum will swing back to some pre-2020 world.

Four significant but underrecognized structural changes over the past decade or so indicate that global interest in prioritizing climate is directional. So while we are experiencing a pendulum “correction,” we shouldn’t mistake pendulum corrections for directional change. The pendulum is on a train, and that train is going to climate town.

Below are those four structural changes, which are themselves directional. They are and will continue to drive directional change in public interest in climate:

* Investor pressure. Now that everyone from BlackRock CEO Larry Fink to U.S. Treasury Secretary Janet Yellen to the Securities and Exchange Commission (SEC) has equated climate risk with financial risk, responsible investors must put climate considerations front and center. Recent SEC draft rules reinforce how central these analyses will be to company operations and disclosures.

* Public sentiment. As discussed in my Both True What to Watch for 2022: Energy Prices, stakeholders tend to interpret current events through their own political lenses. I sat on a panel last week where one participant said the war in Ukraine was accelerating Germany’s permitting of wind facilities and another pointed out that Germany is turning coal-fired power back on. Very few people are rewriting their climate priorities in the face of world events.

* Generational change. The oldest millennials are now turning 41 and continue to take leadership positions across finance, politics, community organizations, and business. They will dominate the population beyond 2050. Gen Z has now joined the millennials in the work force; together they will soon constitute a majority of working adults. Members of these generations, even when politically conservative, prioritize climate — and that is not going to change.

* Company recruiting and retention.

It's been roughly 3 months since I last spoke with Heidi on the podcast and a lot has happened. Elon Musk is buying Twitter (in theory), the cost of living and inflation consumers are seeing is through the roof and yours truly has been re-reading "Atlas Shrugged" and finding the comparisons eerie.  Want to know how a candidate keeps their energy up and spends their time?  This is the episode for you.

This week, I welcome on Brian Gitt, who's investment thesis is that nuclear and natural gas will be the biggest winners in the energy sector over the next 20 years. He draws on 20+ years of industry experience to expose false beliefs about renewable energy and the problems with the environmental, social, governance (ESG) narrative  Here's a deep dive example of how false beliefs about renewable energy are driving bad decisions and harming people and the environment.  You can follow him on Twitter at @BrianGitt and below is a recent post from his website.

 

Europe has an energy crisis. Factories are halting operations in the face of soaring energy prices; families are paying 50% more for heating (or opting to freeze in their homes), and  Europe as a whole continues to destabilize its political position by making itself more dependent on Russia for natural gas.

Europe shows what happens when you adopt policies based on false ideas—myths about energy that all but guarantee high prices, power blackouts, and a crashing economy. Here are 6 of them:

MYTH 1: The world is transitioning to solar, wind, and batteries.

Fact: Solar and wind power are unreliable, raise electricity rates, and over-consume minerals and land. Even after investing $2.7 trillion in them over the last decade, solar and wind still produce 3% of global energy.

MYTH 2: Solar and wind power are the best ways to lower greenhouse gas emissions.

Fact: The biggest emissions reductions over the last 15 years have been due to shifts from coal to natural gas. Natural gas produces only 10% of the air pollutants and 50% of the CO2 that coal does.

Proponents of solar and wind power can talk about the potential of these technologies as much as they want, but the reality is—per Myth 1—the world is far, far away from being able to manufacture, deploy, and maintain this tech efficiently.

MYTH 3: Solar farms reduce household utility bills.

Fact: Households pay more for electricity where governments mandate solar power: households in the United States (US) pay 11% more in the 29 states with solar mandates; households in California pay 80% more than the US avg; and households in Germany saw their energy bills increase by 34% between 2010-2020 because Germany spent hundreds of billions of euros on building massive wind and solar farms.

MYTH 4: Nuclear power is dangerous.

Fact: Nuclear is the safest, most powerful and reliable way to generate low-emission electricity. Only about 200 people have died as a result of radiation from nuclear accidents in over 60 years. This number includes the accidents at Chernobyl, Three Mile Island, and Fukushima.

Even if you count the cancer diagnoses among people exposed to radiation, the harm from nuclear plant accidents remains minuscule in contrast with the millions who die every year from the effects of coal poll...

This week, I'm joined by Mark Nelson.  He is a very worthy follower on Twitter at @energybants for all the latest thoughts and threads concerning nuclear energy.  For instance, here was his thread on the rumors about the Russian forces at Chernobyl.

There are wild claims about Chernobyl going around. I will post the most accurate and authoritative information here and keep this thread updated. FIRST: Chernobyl, even if attacked, is not a credible threat to health from radiation. Several sources claimed that Chernobyl was under attack. Chernobyl's outer containment dome could be breached if targeted. Remaining hazardous material is deep under this. It's been cooling and decaying since 1986. Dispersal would take intentional, targeted effort. Keep an eye on Cheryl Rofer @CherylRofer She is correct in pointing out that it would be difficult to access this material. It is well-characterized, meaning, we know what it is and how it could spread if disturbed. Ukraine gets half its power from nuclear reactors. It shut down Chernobyl fourteen years after the explosion in 1986, under pressure from the EU and only when promised money to complete another partially-built plant. WHAT IS THE THREAT TO THE OPERATING PLANTS? Unlike at Chernobyl, Ukraine's currently operating reactors have lots of highly radioactive material inside them. They need to remain safe. If these reactors lose their connection to the grid, they will automatically shut down.  A silver lining of Fukushima Daiichi accident is that nuclear plants all over the world have prepared for what to do if cut off from off-site power from the grid. You run generators to keep the core covered with water as it cools down over several days. But the grid isn't down.

Ukraine's grid has just completed disconnecting from the Russian grid. Ukrainian grid operators are apparently working through this, and Russia does not appear to have targeted the grid. I will update if this changes. Ukraine's plants are "pressurized water reactors" of Russian design. The Russian name for this is "VVER" which means water-cooled, water-moderated power reactor. Chernobyl's design was totally different. With fixes, Chernobyl-type reactors are still in operation in Russia.

We talk about this and so so much more. Enjoy!

This week, I'm joined by David Blackmon to talk about the state of Washington, the Defense production act, Keystone and how do we get out of this mess?

 

David Blackmon is an independent energy analyst/consultant based in Mansfield, TX. He is the Editor of Shale Magazine and co-host of In The Oil Patch Radio, a nationally-syndicated weekly show. David has enjoyed a 40-year career in the oil and gas industry, the last 23 years of which were spent in the public policy arena, managing regulatory and legislative issues for various companies, including Burlington Resources, Shell, El Paso Corporation, FTI Consulting and LINN Energy. During this time, David has led numerous industry-wide efforts to address a variety of issues at the local, state and federal level, and from April 2010 through June 2012, he served as the Texas State Lead for America’s Natural Gas Alliance. In addition to client-related work, David also maintains a growing media communications practice.

This week, we visit Europe (virtually, anyway) to chat with Irina Slav, an energy writer for oilprice.com, a substack site at https://irinaslav.substack.com/ and we have an in depth chat on Europe, energy and the war in Ukraine, censorship and the green transition.  Her recent article on Boris Johnson playing intermediary for the United States in the Middle East is a must read.  I hope you enjoy.

Of late, rather than screaming into the great abyss that is the cavern between those that worry about climate change and those that don't, I have taken to challenging people on LinkedIn on the other side of the aisle to come on the podcast and discuss it with me.  Of the 30 or so invites I've offered, Colleen is the first to accept and for that I commend her. Here was her post.

And here was my response:

Colleen.   You want to debate some of these points?  I would say human flourishing based on access to energy is kind of key. I would say the lifestyle we live is 100% correlated to our energy consumption.  And I would say that at a cost of $11,300 per person each year, every year for the next 29 above and beyond taxes to try to attempt to get to Biden’s net zero plan is insane.  Adapting is a much more practical solution. Especially as the models are highly suspect and were bought and paid for by the governments seeking to justify the investments that bring in their donations.

Thoughts?

I dig in and try to understand - what do we have in common, what is different and why do we see the world so differently.  I will continue to challenge, discuss and debate because it is the only path forward.  More importantly, I let the listeners decide.  Censorship is a problem for a million reasons, and this is one of them.  If we can't discuss, we can't find common ground.

Colleen is the CEO and Founder of Save our Planet Refillery.  You can find her on LinkedIn!

While the media has fallen in line with the White House and the State of the Union March 1st that unofficially ended COVID, we are still left with an unsettled feeling, careers ruined, and discussion and debate disallowed.  So this week, I invited Rachel Corbett and Ed Carriere, two doctors from Denver who are a part of the Front Line COVID-19 Critical Care Alliance to .... and you won't believe this.... have an uncensored chat.

For Any medical provider who is interested in joining Rachel and Ed in their fight

https://www.coloradohealthcareprovidersforfreedom.com/

And/ or Email us…

 

Here is the link to Stand for Health Freedom group, our strong alliance

https://americansunifiedforfreedom.com/

 

Rachel Corbett – Medical Director

Dr. Rachel Corbett is a native of Austin, Texas. She received her undergraduate degree from Southwestern University in Georgetown, Texas, and her Medical Degree at the University of Texas Medical Branch in Galveston in 1996. She then found the courage to venture beyond the Lone Star State for her residency at the George Washington University Medical Center in Washington, D.C. Before moving to Colorado in 2002, Dr. Corbett worked in private practice at Massachusetts General Hospital in Boston and was an instructor of obstetrics and gynecology at the Harvard Medical School. Dr. Corbett loves the Colorado lifestyle, which ultimately drew her away from the East Coast. She has been in private practice in the South Denver Metro Area since 2002. She enjoys skiing, hiking, and yoga. Dr. Corbett and her husband escape to the mountains with their two young sons and Golden Retriever as often as possible. Roots Medical is proud to have her serve as the Medical Director of this clinic.

This week on the podcast, I welcome Richard Norris. I enjoy Richard's writing, so I invited him on the podcast to discuss the European energy crisis, what happens with the energy transition and how to we have honest and transparent conversations that go forward that address: "Has peak prosperity already happened?"

I enjoyed the conversation and I hope you do too.

About

Dr Norris is a 30 year veteran of the energy industry specializing in Energy Security and Energy Economics.

He runs Pandreco Energy Advisors Inc / Conseillers en Enérgie Pandreco Inc., a consultancy based in Montreal advising banks, asset-managers and energy companies. Fellow of the Canadian Global Affairs Institute.

Recent mandates include advising on debt and equity transactions in Brazil and ESG reporting for Savannah Energy. In addition Dr Norris has presented to the UK’s Parliamentary Group on Energy Studies as well as to the board of one of Africa’s largest banks. He was a guest editor of the IEA “World Energy Investment Report 2021” published mid 2021. Dr Norris has wide board-level experience having been NED at Eland (London listed), President at Candax (TSX listed) and Chairman at Duna Energia (private)

Richard has a broad background covering engineering research, oil and gas operations, senior management roles in both executive and non-executive functions, debt and equity financing as well as personally investing in energy transition start-ups. He has worked extensively in and across emerging markets, speaks fluent French as well as modest Spanish and Portuguese.

Mark Rossano is a good friend of mine.  We met on the set of Bloomberg television November 19, 2019 when we were there to talk with Alix Steel about the Saudi Aramco IPO.  Not surprisingly, we spent 2 hours after by the coffee machine talking about the world- oil, natural gas, geopolitics, trade, lithium batteries.  To be honest, I was in shock about the amount of stuff he knows... and this from a guy that likes to think I know about a lot of stuff.

I invited him on the podcast in March 12, 2020 to talk about coronavirus.... he was the only one in my circle that really understood what the heck was going on.

He's been back on multiple times because I always learn a lot, and today was no different.  It's a long episode- Joe Rogan long, because there was a lot to talk about.  We talk:

Oil: 0-24 minutes (supply, demand, where it's going and how we got here)

Food scarcity and fertilizer: 24- 32 minutes (how bad could this get and what happens this winter?)

Russia-Ukraine war and "what happens" including will there be nukes: 32-69 minutes (Geopolitics, World War II comparisons, how does this end)

Inflation: 69 - 91 minutes (what did Powell actually mean by transitory inflation? How does the Fed resolve this, how bad is monetary policy right now and what is the way out?)

USD: 91-115 minutes (what are the chances the USD won't be the reserve currency of the world?  What does that look like?)

COVID: 115 - 129 minutes (what do we know now that we should have known then?  What would we do different WHEN this happens again? How did social media play into it?)

EVs and should there be a lockdown 2.0: 129 minutes - end: What are the infrastructure and mineral challenges?  Do EVs change everything?  Should Government encourage rationing through a lockdown?)

I believe in long form discussions to really dig in.  I hope it sparks some thought, some investment ideas, some challenges and some interest in picking up some books.  Enjoy.