Markets Glimpse Light
The Upside Case for Pipelines
With Energy Uncertainty, Natural Gas Offers Stability
Where America Gets its Power
Coronavirus Dominates Thoughts on Cheniere
Planting a Cooler Climate
Renewables, nuclear and natural gas are all part of the solution to climate change, along with adding billions of trees. Burning natural gas produces water and carbon dioxide, the two inputs trees need to grow.
U.S. Natural Gas Helps Lower Emissions Again
Crude Catches a Virus
Washington-DC Based Energy Experts Offer Their Outlook
We had an opportunity to meet with a Washington-DC based independent research firm, specializing in energy policy and geopolitics last week. The following is from our notes on their discussion.
Pipelines Slowly Returning Cash
The Coming Pipeline Cash Gusher remains the strongest bull case for midstream energy infrastructure. A trend towards returning more cash to investors is taking hold though.
Clean Fossil Fuels May Be Coming
NET Power has developed a natural gas power plant that produces electricity with no CO2 emissions. Conventional single-cycle power plants burn natural gas (or coal) to heat water which acts on a turbine to generate electricity. This produces CO2, and in the case of coal plants other noxious gases and polluting particles.
Its Iran’s Move
If one thing’s clear about recent developments in the Middle East, it’s that events defy prediction. Yet timing trades in the energy sector requires the seemingly impossible.
Williams Companies Promotes the Little Blue Flame
Tallgrass Investors Catch a Break
Yesterday Blackstone (BX) surprised Tallgrass Equity (TGE) investors by sweetening their offer for the shares they don’t own to match the price they originally paid in March. It marks a victory for Limited Partners in TGE, which retained its partnership structure even though it’s taxed at a corporation so as to avoid issuing K-1s.
Enlink’s Growth Plans Need Better Justification
Why Inflation Isn’t What You Think
The Federal Reserve has long wrestled with stubbornly low inflation. A decade ago few would have expected this to be a problem, but Personal Consumer Expenditure (PCE) inflation, the Fed’s preferred measure, is coming in at 1.8% this year. Federal Open Market Committee (FOMC) members have been considering allowing inflation to overshoot their target of “around 2%”.
Should Closed End Funds Use Leverage?
When Will MLPs Recover?
Elections Usually Boost Earnings
California’s Altruistic Carbon Policy
Pipeline Stocks Are Quietly Recovering
Pipeline Earnings in a Market Focused Elsewhere
Earnings season for midstream energy infrastructure kicks off with Kinder Morgan (KMI) on Wednesday. In April we identified growing free cash flow (see The Coming Pipeline Cash Gusher) as the most important catalyst for higher security prices. We’ll be reviewing quarterly earnings for evidence that the sector remains on track to generate increasing amounts of excess cash that can be used to reduce debt, increase payouts and buy back stock.
Energy Transfer’s Weak Governance Costs Them
MLPs No Longer Represent Pipelines
Another Gripping Episode of Brexit
For constitutional observers, each weekly Brexit installment leaves viewers on the edge of their seats, pondering what further twists in the drama remain. Most recently, England’s Supreme Court ruled against Conservative Prime Minister Boris Johnson’s suspension of Parliament.
America Offers Safer Energy
Saturday’s surprise attack on Saudi Arabia’s Abaqaiq oil facility in Buqyaq has sent crude oil prices sharply higher. There are estimates of up to 5.7 Million Barrels per Day (MMB/D) of lost output. For perspective, the last two big drops in crude oil, in 2008 and 2014-16, were caused by around 2% excess supply. The lost Saudi output, half of what that country produces, represents around 5% of world demand.
Saturday`s Attack Is A Game Changer
Climate Promises from Politicans: America Will Do Better
Blackstone and Tallgrass Further Discredit the MLP Model
The recent offer from Blackstone (BIP) to acquire the 56% of Tallgrass Energy LP (TGE) it doesn’t already own at $19.50 per share has revealed an ethical gulf between prevailing standards at the providers of capital versus the users. No SEC-registered asset manager could do to its investors what TGE management is doing to theirs.