The Future of Energy Episode 5 | Joe Raia, Chief Commercial Officer, Abaxx Exchange and Clearinghouse
Jun 29, 2024
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Joe Raia, CCO at Abaxx Exchange, discusses launching physically deliverable LNG and carbon futures contracts. They talk about building smarter markets, establishing clearinghouses, nurturing industry relationships, evolving energy markets, and using technology for collateral management.
Building smarter markets requires collaboration in product development for the future of energy.
Developing LNG futures contracts addresses market needs arising from the shift in LNG production dynamics.
Establishing an independent clearinghouse enables efficient risk mitigation and rapid expansion of new energy market products.
Deep dives
Introduction of Smarter Markets Podcast and Key Discussion Points
The podcast discusses the importance of market input and collaboration in product development, emphasizing the need for smarter markets in technology, commodities, and finance. It questions whether the current challenges stem from a crisis of information or trust and explores the potential of smarter markets as a solution. The episode features Joe Raya, Chief Commercial Officer at Abex Exchange and Clearinghouse, discussing the recent launch of physically deliverable LNG and carbon futures contracts, highlighting the collaborative effort and expertise involved.
Need for New Commodity Futures Exchange and Clearinghouse
Joe Raya outlines the necessity for a new commodity futures exchange from the ground up, focusing initially on LNG markets due to the evolving industry dynamics. The shift from long-term contracts to spot market activities in LNG production created a gap in pricing transparency and risk management, sparking the development of LNG futures contracts to address market needs.
Significance of Building an Own Clearing House
Amidst the debate on partnering with external clearinghouses, Joe Raya underscores the crucial decision to establish their clearinghouse, emphasizing the flexibility and agility it provides in bringing new products to the market swiftly. Drawing from past experiences, the independent clearing house model allows for efficient risk mitigation and rapid product expansion, ensuring a competitive edge.
Evolution of Product Development and Future Focus
The discussion delves into the evolution of product offerings beyond LNG to include carbon and battery metals, aligning with the transition towards lower carbon energy solutions. Joe Raya emphasizes the importance of continuous partnerships, customer feedback, and a focus on lower carbon product development to enhance market relevance, transparency, and risk management tools.
Reflecting on Experience and Future Prospects
Through his extensive experience at NYMEX, CME, and Goldman, Joe Raya reflects on the pivotal lessons learned in navigating industry shifts and building relationships. Emphasizing the value of trust, honesty, and long-term partnerships, he discusses the culmination of efforts at Abex Exchange and Clearinghouse, focusing on technology advancements, collateral management enhancements, and future developments in the energy market.
We continue The Future of Energy this week with Joe Raia. Joe is Chief Commercial Officer at Abaxx Exchange and Clearinghouse, which commenced trading in its new physically-deliverable LNG and carbon futures contracts yesterday. SmarterMarkets™ host David Greely sits down with Joe to discuss what it takes to build smarter markets for the future of energy – and where we’re going next.
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