Today we had the pleasure of hosting Saul Kavonic, Head of Integrated Energy, Resources and Carbon Research at Credit Suisse Australia. Saul is very well-regarded in the Australian and Asian energy community and joined us from Melbourne (on his Wednesday morning!). He was formerly the Head of Oil, Gas, LNG and Energy at Wood McKenzie and is a chemical engineer by training. We had an excellent and sweeping discussion with Saul and it was fascinating to hear his perspective from Down Under.   Saul first provides context on today’s Australian energy scene, the country’s geopolitical relationships with other Asian countries including Japan, and the influence the current (and relatively new) government is exerting on energy investment. Australia greatly impacts Japan’s LNG supply and has a unique vantage point of being interdependent with Asia but aligned culturally and from a security standpoint with the West. We discuss long-term contracts and issues around them, supply chain in "old" and "new" energy both, investor attitudes, and the types of companies Saul focuses on in his research. Saul shared he enjoys meeting energy executives and investors throughout the region and frequently asks them "where would you put $100 in the energy and energy transition space?" He provides a number of interesting potential answers. We also mention the potential for resource-driven conflict in an increasingly tense world and hear the sentiment from the region. We ended with a quick around the horn summary of where Saul, Arjun and Mike would invest their $100. Their answers were interesting!   Mike Bradley kicked us off with a market update and reported that markets have been relatively quiet for the past 4-5 days with bonds and commodities trading sideways. He flagged earnings beginning this week for oil service companies and that he expects the focus to be on pricing trends. Mike also noted copper prices are not at all-time highs, although there has been consolidation, and that LME stock levels are 50-55% lower than last year and 65-70% lower than the 5, 7, or 10-year averages. He wrapped by suggesting oil and copper prices could increase significantly if there is no recession this year. Arjun Murti also joined today’s session and shared his takeaways from last week’s CGEP events in New York, observing refreshing realism and pragmatism from policy makers including a recognition that Europe’s gas crisis is nowhere close to being over. Arjun also voiced his concern about optimism in Europe that a range of new technologies will ramp quickly and how that can feed a reluctance to fully embrace proven, reliable resources such as natural gas. He wrapped by flagging that coal consumption was likely to grow for the foreseeable future now that it is almost exclusively a developing market fuel source.   We greatly enjoyed our conversation with Saul and thank him for sharing his morning with us for the first SOBW - "Start Of Business Wednesday."   G’day mates! Our best to you all!

We had a fantastic session today with Arshad Mansoor, President and CEO of EPRI (Electric Power Research Institute). EPRI’s formation was initiated by Congress following the Great Northeastern Blackout of 1965 that left 30 million people in the US without electricity. Since then, the organization has served to support the electricity sector with research and development to drive technological innovations and ensure the public has access to clean, safe, and reliable electricity. While headquartered in the US, EPRI has a global presence, is in 40 countries, and has over 400 member companies. Arshad also has 1400 engineers and scientists on his team researching all aspects of electricity. Arshad first joined EPRI in 2006 and his passion for energy, electrification, electric vehicles and technology in general is undeniable. We were thrilled to visit with him for a power-focused and detailed discussion.   Arshad first provides background on EPRI’s history, their partnerships, and global presence. We then cover the importance of reliable electricity, how EPRI is adjusting their planning for reliability in the future and the scientific and technical approach that EPRI takes when evaluating power systems. We also discuss nuclear and the balance of increasing nuclear power while being mindful of budgets, EPRI’s support of both established and innovative nuclear technologies, and how the markets will ultimately pick the winners and losers of energy transition technologies. We then touch on carbon capture and storage’s role in the future, Arshad’s confidence that the US electric grid will support expanded electrification, and the goal to reduce energy-related costs for the average consumer in the US. Arshad also shares his perspective on how utilities view EVs, the "good versus good" involved in the energy transition, batteries and battery technology, the necessity of carbon capture in a net zero future, and more. We had a hard time ending the discussion and wrapped with the two areas Arshad feels need the most acceleration in the energy transition.    To start the show, Mike Bradley reviewed market activity and flagged that markets have been tame as they await this week’s important market-moving economic stats (CPI, PPI & Initial Jobless Claims). He noted market expectations for these stats, expectations for weekly total US inventories, and that EU storage levels are above seasonal averages which could take off pressure on EU natural gas prices. Mike ended with an update on the upcoming EPA gasoline emission rules and the potential implications of new stricter guidelines. Brett Rampal also joined today and peppered in his power perspective to the discussion.   Thanks to you all. We hope you enjoy!

Today we had the pleasure of hosting Lucas Arangüena, Global Head of Sustainable Tech and Group Head of Green Finance at Santander. Headquartered in Madrid, Santander is one of the leading European banks and the largest bank in Latin America. They are also the top financier of renewables globally and a leading advisor overall for M&A across renewables, hydrogen, battery tech, EV charging and energy storage, CCUS & ClimateTech, Biofuels, and AgriTech. Lucas joined Santander in 2010 and is responsible for advising clients globally in their energy transition as well as providing corporate finance advice across clean technologies. We were very interested to visit with Lucas and hear his perspective. As you will hear, the command Lucas has of so many of the technical features of today’s energy world is very impressive. To start the discussion, Lucas first shares the four themes that are his current top areas of focus including the technology paradigm change taking place with the energy transition, electrification of everything and how to add capacity and storage facilities, advising clients on circular economies, and decarbonizing food, particularly protein, which Lucas cites as being responsible for more than 20% of global GHG emissions. His themes segued into a robust conversation on the future of hydrogen demand in Europe, Latin America’s potential and opportunity to help developed economies decarbonize, and Chile’s (solar and wind) and Brazil’s (hydro power) particular promise. We also discuss Santander’s depth and breath in the energy transition markets, touch on some of the projects they’ve financed in the US, Lucas’s and his group’s passion for technology, and the future of infrastructure and industry in Europe. We continued the conversation with the importance of having an orderly and fair transition, Santander’s decarbonization targets for energy, steel and aviation, the Net Zero Industrial Act compared to the IRA, the odd dynamics of Chinese and Korean battery companies benefiting from IRA tax credits, and Lucas’s perspective on the two greatest opportunities for decarbonization by 2030. We ended with the future of public and private debt with as countries continue to provide subsidies for the transition, developments in carbon capture, and the importance of taking action now to achieve decarbonization goals. The Veriten team kicked off the show: Mike Bradley shared his observations on the surprise OPEC cut, noting it’s impact on pushing crude oil prices higher and how the last surprise cut in October 2022 also spiked prices over the ensuing weeks. He highlights several reasons why OPEC might have chosen to cut production and then discussed Ovintiv’s recent Permian shale acquisition. He wrapped up by noting that Glencore PLC launched an unsolicited bid for Teck Resources and concluded that both these recent deals, as well as a handful of deals announced last week, demonstrate that we’re still in the early innings of energy and mining consolidation and that the amount and size of future deals could be healthy. Jeff Tillery shared his thoughts around Q2 earnings with an emphasis on sustainable returns. It was our pleasure to host Lucas and we want to thank him for sharing his perspective. We are excited to spend more time with him in the future. Thanks to you all for your support and friendship!

Today we were delighted to host our good friend Ken Hersh, President and CEO of the George W. Bush Presidential Center. Prior to his position at the Presidential Center, Ken was the co-founder and long-time CEO of energy private equity firm NGP. Ken’s first COBT appearance was in November of 2020 and since our last visit, Ken has written a new book entitled "The Fastest Tortoise Wins the Race: Winning in Industries I Knew Nothing About." The book was officially published on Tuesday, March 28th and we couldn’t be more excited to visit with Ken and discuss the book. As you will hear, our whole team got (and read!) advanced copies and thoroughly enjoyed it.   In our conversation, we cover the broad array of topics Ken hits in the book and intersperse some of today’s energy hot button issues. We start with Ken’s inspiration for the book, cover some of the important moments in energy history that he has been a part of (the formation of Pioneer Natural Resources and of Energy Transfer, just to name a couple), re-live the journey of co-founding and leading NGP, and explore cultural and operational philosophies like "feeding your winners" and paying attention to signals ("yellow lights don’t turn green"). We also touch on the importance of betting on a team for the long-run, Ken’s early involvement championing energy technology and adaptation, the latest estimate of the IRA’s total cost and government spending in general, and what Ken describes as “leapfrog” opportunities in the energy transition. Ken walks us through his perspective on the clash between today’s fast-paced world and the deliberately slow institutions we have built in government and elsewhere, comments on the future of private equity, and some of the keys to building a collaborative and trusting culture. As we wrapped up, we of course probed him about what the future holds. In sum, we loved the book and the visit both.   Mike Bradley offered up five highlights/observations from the past week and for coming weeks. He observed that markets are becoming "Comfortably Numb," meaning investors are gaining "comfort" that systematic risks are lessening but "numb" in the sense that recession fears are still heightened. He also observed that bond yields are temporarily stabilizing because consensus believes (hopes) rate hikes are over and that the next move might be down in rates. He highlighted crude markets rebounding back to a previous trading range, near-term SPR refills by the Biden Administration looks to be fantasy, OPEC will likely not change their previous production policy at next week’s meeting, and that the energy sector has temporarily become more correlated with regional bank equities than crude oil price. Mike also flagged the handful of traditional and new energy deals announced over the last week. He wrapped by highlighting a Richard Rainwater quote "where there is chaos - there is opportunity," and applied this concept to the recent purchase of Silicon Valley Bank by First Citizens Bank. Jeff Tillery also joined for today’s engaging session.   We took a lot of lessons from visiting with Ken today and hope you enjoy it as much as we did. Our best to you all!

Today we were thrilled to welcome back our good friend Corby Robertson, Chairman of the Carbon Neutral Coalition (CNC). Corby’s extensive career includes over 40 years of global investment and operations in energy and natural resources and as a proud Texan, he is focused on what the state looks like in the decades to come. The CNC’s mission is for the state of Texas to be carbon neutral by 2050 and the organization is focused on the necessary education and regulatory changes to achieve their goal. As always, it was our pleasure to host Corby.   To help frame the discussion, Corby provides a detailed walkthrough of the organization, why the organization is focused on CCUS and their other objectives, and the importance of how the liability and regulatory aspects of CCUS are managed. We also hit on the organization’s management team and their community of advisory board members, the audience the organization is able to reach with social media, and studies that various universities are conducting on economic impact, as well as the incentive bills that could help us implement CNC’s proposals. Corby was last on COBT on March 26th, 2021, and so we also touch on the momentum CNC has created in the past two years, the bills they are currently supporting including the franchise tax credit, property tax credit and liability bills, the upcoming legislative session, and we wrap with Corby’s vision for a more vibrant Texas in ten years. It is fantastic to see the progress the CNC has made and we’re excited to watch and support their efforts in the years to come.   Mike Bradley kicked off the show flagging a few key items including the upcoming FOMC meeting (March 22nd), implications of rising rates and what markets are expecting (consensus = 25bp hike). He highlighted that high inflation, the FED aggressively hiking rates and recent banking instability all have roots in governments globally outspending. He rounded out the segment by noting that global crude oil price weakness has less to do with current supply/demand fundamentals and more to do with a global risk off trade, and that equity investors, though modestly more concerned with 2H’23 global demand, are even more concerned with global upstream underspend, which will support higher “normalized” commodity prices. Jeff Tillery touched on recession concerns and historical context of energy demand.   Thanks again to Corby for a fantastic discussion and thanks to you all for your support and friendship. 

Today we were delighted to host Jarand Rystad, CEO of Rystad Energy. Jarand founded Rystad Energy in 2004 following a long tenure with McKinsey & Company to build an independent research and consulting company rooted in granular data. Rystad Energy tracks all energy sources, from production to consumption, to provide detailed analysis. We had a wonderful visit!   Our discussion explored a range of topics starting with Jarand’s background and inspiration for creating Rystad Energy, the company’s growth in scale and depth of analysis, the data and analytics the company tracks, Jarand’s day-to-day involvement, and the importance of adding energy transition supply chain capacity in the US and Europe. We also touch on the concept of energy transition vs. diversification, Jarand’s view on how new technologies and the free market will outcompete oil and gas, the role of nuclear, future supply and demand for electrification, Rystad Energy’s data on new energy materials, and more. We ended with Jarand’s view for the energy world ten years from now and walked away with a great appreciation for the work Jarand and Rystad Energy are doing.   To kick off the show, Mike Bradley presented a market update from the past week, including a closer look at the historic three-day decline (100bps) in 2yr US Government bond yields and why that’s changing the Federal Reserve’s previous hiking campaign of higher, faster, and longer to one that most market participants believe will be shifting to lower, slower, and shorter. He noted that the recent Silicon Valley Bank seizure had enormous implications for venture capital funding and that it would likely lead to less, higher cost and more stringent funding for Tech and New Energy startups. He wrapped up by reviewing recent events, including ConocoPhillips’ Alaskan Willow project approval, Aramco’s large boost in future capex spending, and a handful of key themes coming out of last week’s CERA Conference. Arjun Murti chimed in and emphasized the importance of understanding risk and finance controls within a company and what are inherently less sexy aspects of running an organization. He also flagged that all companies should be considering how international climate policy and regulations might impact them, even if those policies seem distant in location or time.   This week marks three years of COBT and we are thankful for all of your support along the way. Thank you to Jarand for being a fantastic guest to mark the occasion! 

Today we had the pleasure of hosting Georges Tijbosch, CEO of MiQ in our office for a special edition COBT. Georges and his team are in town for CERAWeek and have made exciting announcements during the conference. MiQ is an independent non-profit organization that set up a framework to certify natural gas graded on methane leak levels. They are largely funded by philanthropic efforts and are committed to addressing methane issues in this decade, a mission we appreciate. Jeff Tillery, Mike Bradley and I greatly enjoyed visiting with Georges.   To help guide today’s discussion, Georges first provided background on the organization including the formation of the group, their technical process for evaluating emissions, how attitudes around methane emissions have changed in the past few years, and the organization’s interaction with the energy industry. In the past year, they have increased to certifying ~20% of US gas production. We also discuss the organization’s future plans, the advantage of being an independent group, the typical methane escape associated with natural gas production, Georges’ vision for ten years from now, the organization’s interactions with the investment community, and natural gas as a long-term solution for Europe. Earlier this week, MiQ announced that BP has certified 100% of its U.S. onshore upstream operations with MiQ. It was an exciting time to meet with Georges!    The conversation with Georges was far ranging and incredibly stimulating. For those of you like us who strongly believe in natural gas as an answer, Georges will have you thinking about not just how good an answer it can be but also about what can be the problems. You will also hear that so many of those problems are “low hanging fruit” and can be fixed and fixed soon. We are so glad Georges came by the office to visit during this busy CERA season.     We look forward to staying connected with the team at MiQ and watching their progress in the years to come. Thanks to you all! 

It’s CERAWeek in Houston and we are excited to share another interesting global perspective on energy. Today we had the opportunity to visit with Dr. Lars Schernikau, economist, entrepreneur, commodity trader, and Co-Author of “The Unpopular Truth about Electricity and the Future of Energy.” He is also the author of "Economics of the International Coal Trade." Lars joined from Geneva and has twenty years of experience in commodities, particularly both basic energy and energy transition commodities / raw materials / minerals / etc. As you will hear, he’s incredibly passionate about energy, energy economies, and energy and environmental policy. We covered a fascinating and broad range of topics.   Our discussion spanned Lars’ vantage point from his experience as a commodities trader and exposure to the entire energy supply chain, coal markets and their importance to electricity, coal market development over the next five to ten years, and the inevitability of its appeal in Asia as affordable and reliable energy. Lars also shares fascinating data on global wind and solar irradiance, capacity issues that technology cannot fix, recent acknowledgement of looming Germany power capacity issues, challenges with long-range forecasting, the pressure on banking systems, and a few concepts Lars covers in The Unpopular Truth including full cost of electricity. We wrap with Lars’ perspective on nuclear and what Lars thinks the energy world will look like in ten years. Lars was a fantastic guest and we greatly enjoyed our conversation.   To kick off the show, Mike Bradley covered a market update from the past week, including a closer look at what’s happened in the last five days, and compared key themes from this year’s CERA conference to 2022. Jeff Tillery continued the CERA discussion with his highlights.   Thanks to you all. We hope you enjoy!

Today’s COBT episode is focused on Norway and in particular, the country’s technology, climate tech, and broader energy landscape. What most of us don’t realize about Norway is the country is the 7th largest natural gas producer in the world, is the single biggest supplier of natural gas to Europe, gets 90 percent of its own power from hydro, and is a major source of energy innovation. We have three excellent guests to help guide the discussion including Karl Liapunov, Head of Energy at Startuplab, along with Arild Selvig, CEO of ZEG Power and Jørgen Festervol, CEO of Heimdall Power. Startuplab is Norway’s largest incubator and the country’s most active early-stage investor and both ZEG Power and Heimdall Power are graduates of Startuplab! It was our pleasure to host the group and we were excited to dig in.   Karl first provides context on Norway and background on Startuplab’s program, which receives 600 applications a year and provides a network of founders, mentors, investors, industry experts and corporate partners to help companies succeed. Karl also shares key highlights from Startuplab’s recent report, “Energy Transition & Climate Tech in Norway." We then turn to Arild and ZEG Power, which is focused on providing clean hydrogen with a uniquely simplified carbon capture process. Jørgen shares background on Heimdall Power and the company’s fascinating grid technology. With a good understanding of each company’s features and role in the Norwegian and potentially global energy landscape, we discuss the themes and types of companies Startuplab sees in the Norwegian energy market, where Hydrogen will be most valuable, the potential FERC requirement for dynamic line monitoring, Heimdall’s new Houston office, and more. We end the discussion with Karl, Arild, and Jørgen’s advice to early-stage companies and each had fantastic advice. We can’t thank them enough for joining!   Mike Bradley kicked off the show by flagging that the rise in US bond yields continues to be a headwind for US equity markets and will probably continue to be a headwind until the March 22nd FOMC meeting. He highlighted WTI crude oil price has been stuck in a relatively tight trading band (~$72-$82/bbl.) over the last 3-4 months and that energy companies are getting comfortable with that trading band and potentially a higher trading band for 2H’23. He also flagged the sharp rebound in an oversold natural gas market due to a late winter blast but also that S/D fundamentals are still out of balance. He wrapped by referencing the cross-border merger deal between Baytex Energy (Canadian-based) and Ranger Oil (Eagleford-based), and the possibility of an acceleration in 2023 E&P M&A. Todd Scruggs, Veriten’s senior partner focused on investments, rounded out the Veriten team for today’s session.   A big thank you to our friends in Norway for sharing their time and expertise and thanks to you all for your support and friendship! 

We are excited to share with you this COBT Special Edition featuring our good friend Jigar Shah, Director of the US Department of Energy Loan Programs Office (LPO). The LPO is the largest private debt fund in the energy space with more than $400 billion available for innovative clean energy projects. As you will hear, Jigar and his team of 250 professionals at the LPO have immensely valuable insights as to what’s really happening with early-stage companies and technologies across the energy spectrum. Jeff Tillery, Brett Rampal and I had the opportunity to visit with Jigar ahead of CERAWeek for a check-in and for a preview of DOE’s plans for the event. It is amazing how much has transpired since our last COBT discussion about six months ago.   In our conversation, we touched on the LPO’s progress since Jigar joined, the 126 applications that have been processed seeking almost $120 billion in funds, Jigar’s assessment that the US is in a deployment-forward position, how the LPO manages risk, harnessing the information that the LPO office receives, which new energy sectors are reaching a tipping point, and the Nuclear, Hydrogen, and Long Duration Energy Storage reports that the office is rolling out during CERAWeek. We also discuss how EPC contract availability is impacting emerging energy projects, the difference between “industrial policy” and “industrial strategy,” the IRA, remedying fragile supply chains, the CHIPS and Science Act’s influence on loans and development, Fortune 500 companies and their role in the energy transition, and more. We greatly enjoyed talking with Jigar and have loved getting to know him over the last year. We hope you enjoy this Special Edition conversation as much as we did!   As we wrap up, we also wanted to share with you some developments with our team. Our longtime friend and partner Colin Fenton has decided to pursue new opportunities in his career and we are certainly sorry to see him move on. His thoughtfulness and creativity will be missed and we wish him massive success in his future endeavors.    All the best to Colin and to all of you as well!