C.O.B. Tuesday

As we all kick off Climate Week, we are beyond excited to share this Special Edition COBT! Late last week, we traveled to Woods Hole, Massachusetts to meet Dr. Peter de Menocal, President and Director of the Woods Hole Oceanographic Institution (WHOI), a leading independent non-profit organization founded over 90 years ago with a nimble and entrepreneurial approach to science. Peter was elected as the 11th President of WHOI in October of 2020 following an extensive 30+ year career at Columbia University. After a tour of their impressive facilities including discussions and demonstrations with key scientists and team members at WHOI, Colin Fenton and I were delighted to visit with Peter and talk about WHOI's passion for understanding what is 70 percent of any Earth equation... the ocean! We covered an extensive amount of territory in the discussion, starting with the breadth and depth of WHOI’s operations, the scope, scale, and promise of the ocean’s carbon-storing capabilities (for detailed research see "A Research Strategy for Ocean-based Carbon Dioxide Removal and Sequestration" published by the National Academies), how WHOI's location in Cape Cod allows easy access to deep water research, the organization’s partnerships with the Navy, NASA, NSF, and NOAA, the stunning scope of WHOI’s work (over 800 simultaneous projects at any one time), Peter's mission to see what can be accomplished in the next ten years and his commitment and emphasis on having the courage to pursue big challenges, the organization's independent culture and focus on an entrepreneurial spirit and action, and much much more. With so much left to discover in the ocean, Peter also shared several pioneering areas WHOI is researching including the Ocean Twilight Zone, Alvin discoveries, the Ocean Vital Signs network, and a partnership they have formed to commercialize WHOI technologies (“Propeller Project”). WHOI has several key initiatives and we also touch on their Ocean Observatories Initiative or “OOI.” In OOI, WHOI makes its gathered ocean data available to all as a public service to the global science community. We were blown away by the entire experience and are excited to share our findings with you. Again, we can't thank Peter and the team at WHOI enough for their hospitality and for sharing their time, expertise, and important work. Keep up the great work WHOI!  And big thanks to all of you for your friendship and support!

Today we had the opportunity to visit with Armond Cohen, Co-Founder and President of the Clean Air Task Force (CATF). Armond co-founded the CATF over 25 years ago with a mission to decarbonize global energy systems through modeling and systems analysis, technology innovation, and policy advocacy with a focus on diversification of energy sources. For today's session, Armond joined us from London and first shared a few timely thoughts on the energy supply volatility in Europe and the value of diversification of supply.  In our discussion, we cover background on the CATF and the organization's evolution, the organization's current focus on advanced renewables, nuclear, and pioneering interest in carbon capture technology, perceptions of the fossil fuel industry and its place in the future, the public's involvement in the climate discussion, the cost/benefit analysis of renewables, the challenges for technologies to make an impact in areas with limited access to energy, and more. We greatly enjoyed the conversation and appreciate Armond's optimistic and pragmatic outlook. Mike Bradley kicked us off with an overview of commodity and equity market volatility and a few notable factors including the proposed EU plan to cap generation revenues and introduce mandatory energy consumption cuts and the US national rail workers strike threat to supply chains. Colin Fenton reiterated the importance of the recent US CPI index report and the powerful inflationary forces at play. Brett Rampal also chimed in to help frame the nuclear power discussion. Our best to you all! We hope you enjoy.

We hope you had a safe and restful Labor Day weekend. For this week's COBT, we had the pleasure of hosting  Katherine Blunt, Renewables and Utilities Reporter for The Wall Street Journal and Author of recently-released "California Burning: The Fall of Pacific Gas and Electric and What it Means for America’s Power Grid," published just last week. Katherine was quickly thrown into covering the PG&E story in 2018 as the Camp Fire erupted three days after she started. Since then, she has investigated PG&E's complete history to understand all the contributing factors to that tragic and devastating fire. It's a complicated story with serious consequences and her book is a straightforward and insightful examination of not only the fire, but America's power history. Her well-received new book also contains many implications for utilities across the country. In our discussion, we touch on key themes in "California Burning" including the formation of monopoly companies supplying power to California in the early 1900s, the lack of maintenance on nearly 100-year-old equipment which was the catalyst to the fire, the people and infrastructure involved in California's electric power system, PG&E's bankruptcy and restructuring program, the negotiated settlement for fire victims, public perceptions of PG&E, reactions to the book, the pressures utilities face to keep expenses low, PG&E's nuclear asset Diablo Canyon, and more. PG&E has declared the book will be required reading for employees, a promising declaration as they work to bury ten thousand miles of distribution lines and mitigate fire risk for the future. The book is very well written, Katherine was a fantastic guest, and we all feel much more informed. Thank you, Katherine!The Veriten team quickly hit a few key points to start the show:  Mike Bradley reported live from the Barclay's CEO Energy-Power Conference in New York and touched on early conference themes, market volatility, recent deal activity and news, and a recent California law on EV production and implications on power generation.  Colin Fenton flagged lithium prices, Russian gas flows into Europe, Iranian crude oil exports, and prepared us for the discussion with Katherine looking at California-Oregon border and Palo Verde power prices.  As always, thank you for your support and friendship!

We had an exciting field trip today to tour the new Deloitte Greenhouse facility in Houston. While there, we had the opportunity to visit with Amy Chronis, Vice Chair, US Oil, Gas & Chemicals ("OG&C") Leader, and Houston Managing Partner. Amy has twenty years of experience as a Partner at Deloitte and leads the strategic direction of Deloitte's OG&C practice and Houston office, a group of over 5,000 professionals. The Greenhouse tour was fascinating, and we had a wonderful time with Amy and her team. Our discussion with Amy was very timely given the release of Deloitte's recent report, "Striking the balance: How and where will oil and gas producers deploy their cash?" We kick off the conversation with an overview of the Greenhouse, inspiration for the space, and Deloitte's vision for creating a one-stop experience for organizations to "ideate," engage, build strategies, create prototypes, and address challenges in a collaborative and creative space. We then dug into the key findings and suggestions from "Striking the Balance." We talked with Amy on a wide range of topics covered in Deloitte's analysis, including the original inspiration for the report, the shale industry's remarkable "cash rally" after a negative decade, the four archetypes the Deloitte team sees for strategies going forward, various reactions to the report so far, the great progress oil and gas has made in reducing Scope 1 emissions, investor attitudes, and more. It was a far ranging and thoroughly enjoyable discussion. To kick us off, Mike Bradley talked about another volatile week in the markets. As you will hear, Mike touches on more than a handful of variables weighing on the market, with the Fed being a really large one of course. Mike also gets into some of the proposals coming out of Europe to deal with the energy crisis there. Colin Fenton picked up on the Fed commentary and also the EU power pricing discussion. He noted in both Europe and in the US, too many government officials are talking about heavy-handed and potentially counter-productive government energy intervention.  We want to thank Amy and the Deloitte team for the tour, the discussion, and the hospitality. We hope you all enjoy the conversation as much as we did! 

Late last week, we traveled to Cranberry Township, Pennsylvania to spend the day with our friends from Westinghouse Electric Company. While there we met key members of the team, toured the facilities, saw full scale mock-ups of traditional nuclear reactors, visited the prototype workshop for the eVinci Micro Reactor, and also had a one-hour sit-down with President and Chief Executive Officer Patrick Fragman. It was an absolutely fantastic experience and we can't thank the Westinghouse team enough for their hospitality. Today, we are thrilled to share the episode along with a current market update from our team. As many of you know, Westinghouse was founded by George Westinghouse over 130 years ago and is an iconic American technology company. The company pioneered the power generation industry among other developments including steam turbine generators and gas turbines, and was pivotal in the development of nuclear energy systems for electric power generation. The company built the first US commercial nuclear reactor (which opened in 1957 and is still in use today) and also built the first nuclear reactor for a submarine in the U.S. Navy. Of the 440 nuclear reactors in the world today, half are based on Westinghouse technology. As you will see, we hosted the discussion with Patrick Fragman in Westinghouse's AP1000 control room simulator. Patrick has more than thirty years of experience in global power and energy services. Prior to Westinghouse, he served in leadership positions at ABB and Alstom, and was also formerly an Advisor to the French Government in various industrial and energy-focused roles. In our conversation, we explore Patrick's background and expertise, the history of Westinghouse, Westinghouse's global reach and visibility into nuclear around the world, the challenges and excitement of building the first nuclear plants in the US in 40 years, excitement around micro reactors, the company's culture, the components of their overall business and the recent acquisition of BHI, Westinghouse's recent activities in Ukraine, China, and Eastern Europe, the growing acceptance of nuclear, the resurgence of young talent interested in the nuclear industry, and MORE. We wrap with Patrick's ten-year outlook for Westinghouse and the nuclear industry.    In today's lead-in, Mike Bradley shared an update on weekly equity and commodity performance and expanded on 2H'22 markets for crude oil, natural gas, and overall energy sector themes. Colin Fenton picked up on the natural gas theme with an analysis on today's natural gas price and flagged the upcoming 6-month anniversary of the Ukraine invasion with observations on the futures and options market since then. Brett Rampal also joined to preview our visit at Westinghouse. We want to thank the Westinghouse team profusely for the opportunity. We hope you all enjoy the discussion as much as we did! As always, thank you for your support and friendship. 

We had the honor of visiting with Ambassador David Satterfield, who recently assumed the role of Director at  Rice University's Baker Institute for Public Policy. Ambassador Satterfield's extensive foreign service career includes over four decades of diplomatic and leadership experience in the United States and overseas in the Near East and Europe, notably serving as Ambassador to Lebanon and Turkey and Charge D'Affaires in Iraq and Egypt. We had the unique opportunity to host the discussion in Secretary James A. Baker III's office at the Baker Institute. We were thrilled to meet the Ambassador, get his global perspectives, and hear about his vision for the Baker Institute. For those of you who don't know, the Baker Institute has been named one of the leading non-partisan think tanks in the country. With the Ambassador's background, our conversation had a decidedly international focus. We touched on the State Department's increased advocacy for American business beginning in the 1980s, the Department's market orientation and desire for market stability, the value of principled pragmaticism, the ongoing crisis in Ukraine and the implications for other countries that are bracing for an extended conflict, the United States' response to the crisis, the financial and geopolitical implications of limited OPEC excess supply, food price inflation, the energy transition, and more. It was really thrilling to sit with someone for whom no geopolitical question was too far afield. We loved the session. In our upfront discussion, Mike Bradley shared a natural gas and crude oil commodity update and flagged a few key items including Aramco's half year conference call, Russian EU sanctions, global SPR draining, OPEC underproducing quotas, and Iranian sanctions. Colin Fenton continued the discussion with macro insights on markets and program trading, a warning to look at real economies instead of financial metrics, comments on the S&P 500 200-moving day average, and other insights on the current inflationary environment. We had an excellent visit with Ambassador Satterfield and can't thank him enough for the opportunity. Thanks to you all for watching! 

Today we had a fantastic guest for our COBT discussion, Dr. Karl Meeusen. Karl serves as Director of Markets, Legislative and Regulatory Policy at  Wärtsilä. His career in electricity markets and energy policy has included four years at the California Public Utilities Commission and most recently nearly ten years at California ISO. Now at Wärtsilä, Karl advises policy makers and market participants on power system modeling requirements and resource capabilities. There are many layers to the complexity of modeling reliability in a renewable system and we learned a lot in our session.  Wärtsilä was established over 180 years ago and is based in Finland. They develop power plants, hybrid solutions, energy storage and optimization technology designed to increase efficiency and promote reliability. To date, they have deployed 76 GW of power plant capacity and more than 110 energy storage systems to 180 countries around the world. We explored a range of topics from current regulator sentiment, Wärtsilä's history, the impact of volatility on utility modeling and forecasting, Wärtsilä's toolbox of interesting technology including modular natural gas engines, their key steps to "Front-Load Net Zero," the value of flexibility in a renewable system, and more. Thank you Karl for sharing your time and expertise with us all! Mike Bradley started us off with two key topics today. First, he highlighted the upcoming CPI and PPI data releases this week and noted the EIA released their short-term energy outlook with the IEA and OPEC releasing their reports on Thursday. Then, with earnings season mostly behind us, he shared Q2'22 commodity and equity themes with a look at market performance from the day before second quarter earnings started through to today. Colin Fenton painted the big picture with Friday's Employment Situation report, pointing out that the payrolls statistics excludes agricultural and gig workers, signs that the inflationary pressures are beginning to affect the labor pool, and signs of the other ingredients that typically combine to make U.S. recessions. Thank you for your friendship and affiliation with us. We greatly appreciate it! 

We had the good fortune of visiting with Dr. David Victor today for an engaging discussion on climate, policy, and in particular, problem-solving structures that feature "experimentalist governance." Dr. Victor is a Professor of Innovation and Public Policy at UC San Diego and Co-Director of the UC San Diego Deep Decarbonization Initiative. He has published over 200 articles and books on climate change and the "transition from a high emissions energy world to a low emissions energy world." Today is the release date of his latest book which he Co-Authored with Charles Sabel, "Fixing the Climate: Strategies for an Uncertain World." We thoroughly enjoyed the discussion, Dr. Victor's pragmaticism, as well as his upbeat demeanor. Fixing the Climate explains why effective climate policy requires government and business collaboration and an emphasis on experimentalism. The book features examples of successful environmental policy, with a particularly deep and illuminating dive into the Montreal Protocol, the world's successful answer to attacking the CFC/ozone problems. In our conversation, we look at the balance and symbiosis between vision and leadership at the Federal level and problem solving in local communities, the key factors Dr. Victor thinks will determine natural gas's future, how to improve education, the need for more focus on climate impact, as well as a range of other issues. As you will hear, Dr. Victor is spending more and more time with energy and other industries, learning and helping from the inside out how incumbent players can meaningfully and profitably contribute to the way forward. To kick off the show,  Mike Bradley highlighted his two key focus items for the week including his expectations for the OPEC+ meeting this Wednesday as well as for more energy earnings.  Colin Fenton commented on recovering markets, and some recent potentially positive policy moves, but cautioned there are considerable challenges in front of us, just one example of which is the agitated swirl around Speaker Pelosi's trip to Taiwan. 

Today's subject is something we have wanted to study for some time now: global population growth. We were lucky enough to find a leading expert to join us and today had the pleasure of hosting  Dr. Darrell Bricker. Darrell is a Senior Fellow in Global Affairs and Public Policy at the University of Toronto, the CEO of Public Affairs at Ipsos (the world's leading social and public opinion research firm), and the Co-Author of "Empty Planet: The Shock of Global Population Decline." All of us here at Veriten enjoyed reading Empty Planet. As you will hear, Darrell and his Co-Author John Ibbitson not only immersed themselves in all the available UN data but also traveled to six continents to conduct field research and interviews to refine their assumptions as they created their own estimates of global population growth through 2100. It was a fantastic and riveting conversation. To help frame our discussion, we kicked off with a few data points on historical global population, global life expectancy, the UN's fertility scenarios for through 2100, and the UN's projected global population (medium-fertility scenario is 10.36 billion in 2100). From there, we jump into a lively conversation with Darrell about Empty Planet, the driving factors behind a potential decline in global population, the issue with population models, a deep dive on cultural factors in Brazil and China, COVID-19's impact, cultural shifts in immigration, and the impact of climate change. We reference Charles Jones's study on the unintended consequences of a declining population. It was a fascinating session and we are thankful to Darrell for sharing his time and expertise. The Veriten crew started the show:  Mike Bradley shared an overview of weekly equity and commodity performance, flagging a busy week for earnings in the energy sector and prepped us for our main discussion with a look as debt as a percent of GDP across the top ten economies in the world.  Colin Fenton walked us through the key factors affecting gasoline and natural gas prices and warned the Federal Reserve will need to continue to raise interest rates.

We have an exciting Special Edition episode to wrap up the week! We had the pleasure today of hosting Darren Peers, Equity Investment Analyst at Capital Group. Darren has 25 years of investing experience, the recent 8 plus with Capital and prior to that NWQ and Putnam. He is a great friend and we very much respect his highly analytical mind and overall approach to investing. It was fantastic to visit with him and get his perspective on issues we are all thinking about in today's volatile market. Darren first helped frame our discussion with background on Capital Group, their mission, approach to investing, structure, culture, and reward structure. We then jumped into an array of topics including the increased interest in investing in oil & gas, the top factors Darren evaluates when making investments, industrial activity in Europe and the implications of Europe's energy problems, US E&Ps, the future of diesel, a carbon tax, takeaways from his recent meetings at the Calgary Stampede, the green complex, volatility in the oil & gas sector over the next few years, and more. We wrapped with Darren's outlook for the next ten years. As always, Darren's responses were extremely thoughtful and very much worth a listen. The Veriten team hit a few items before our main discussion with Darren:  Mike Bradley highlighted a noteworthy indicator from AT&T and Colin Fenton expanded on jobless claims and noted price sensitivity with gasoline demand, the ECB's 50-point basis hike, and upcoming potential demand issues for Europe. We hope you enjoy the conversation as much as we did! Thanks to you all.