Our investments in oil and natural gas stocks – Ep 205
Nov 2, 2023
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The podcast discusses the politicization of the oil and gas industry, financial situations of tobacco and oil companies, the importance of oil and natural gas in modern society, and transitioning to green energy and investing in petrochemical companies.
Enrollment in petrochemical engineering programs has dropped by 75%, raising concerns about future supply and qualified professionals.
The demand for petrochemicals is continuing despite climate change concerns, and the transition to greener energy sources will take time.
Deep dives
Declining enrollment in petrochemical engineering programs
The podcast discusses the decrease in enrollment in petrochemical engineering programs due to negative perceptions of the industry. As younger generations view oil and gas companies unfavorably, enrollment in these programs has dropped by 75%. This decline, combined with the retirement of older engineers, raises concerns about future supply and the ability to replace qualified professionals. The podcast suggests that this underinvestment could have long-term implications for the petrochemical industry.
Demand for petrochemicals and natural gas
The podcast highlights the continuing demand for petrochemicals, despite concerns about climate change. The demand for petrochemicals, which are used in various essential products and processes, is not changing rapidly, while supply is expected to decline. The podcast also mentions the role of natural gas in generating electricity for electric vehicles and the increasing demand for natural gas in the face of declining supply from Russia. It emphasizes that the transition to greener sources of energy will take time and that oil remains an interesting hedge against a weakening dollar.
I am about to discuss a topic that, for reasons that are unclear to me, has been politicized: oil and gas. I am writing this as a pragmatic analyst who looks at two factors: supply and demand. After all, I am not hired by you (IMA clients) to come up with environmental policy but to grow your wealth.
WHO AM I: Vitaliy Katsenelson is the CEO of Investment Management Associates (IMA) in 2012. Forbes Magazine called him “The New Benjamin Graham.” He’s written for publications including Financial Times, Barron’s, Institutional Investor, and Foreign Policy.