the Plug

1/n After a series of client meetings these past weeks, a recurring theme has emerged on the US energy “transition.” Investors seem overly focused on variable costs for new energy tech right now. Not enough attention is being paid to capex, cost of capital, and build time. 🧵

@wilson_ricks This was a fantastic thread. Thanks for sharing, and for saying what no one else has been bold enough to.

California, Oregon and Washington have all been climate leaders, but the stance they've chosen to take on this issue adds tarnish to that reputation. Climate progress should not be used to buy indulgences. These states can and should do better.

This is a (late) callout thread directed at the governments of California, Oregon and Washington, ostensibly climate-conscious states which have gone out of their way to advocate for lax Federal standards on clean hydrogen production: regulations.gov/comment/IRS-20…

The CA agencies provided no analysis in support of their bold claims, because no actual study would back them up. So this is essentially just a set of states using 'trust me bro' as justification for warping a half-trillion dollar federal program in their favor.

Anyone else remember how we were supposed to have a supply-driven super cycle and then OPEC+ cut production by 5 MMbpd and we traded sideways for a year?

I’ll take the other side of this bet.

PMPP looking more likely with every passing day.

@MikeUmbro You had me excited for you brother… the last line brought me back down to reality

Just sold our Kern County project for $250 million! Pizza night celebration 🙌🏼🇮🇹🍷🍕 Stoked for this life changing transaction with One World Petroleum.

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Energy nerds, you don’t get the night off. There’s a whole energy title in the Immigration/Security bill. (Pages 24-29 in the bill text). Spoiler alert: nuclear.

Nigeria's currency has lost 2/3rds of its value relative to USD over the past year. Anyone holding domestic cash/deposits had their savings greatly devalued, and everyone who is paid in the local currency who can't negotiate a tripling of their income has less purchasing power. There are 160+ currencies in the world, with each one being a centralized ledger. Many of them lose value rapidly, with this being the most recent example, affecting 200+ million people. Since the currencies are all localized monopolies, people historically had little choice other than to denominate contracts and savings in them, and keep getting rug-pulled. The wealthy often have more avenues to get foreign bank/brokerage accounts to hold value elsewhere, while the less wealthy often have fewer ways to get out of the repeated rug-pulling with whatever modest savings they have. Technologies like bitcoin for the long term and stablecoins for the intermediate term give me people more options. They take what was once mostly accessible to the wealthy (more solid value outside of the control of the local centralized rug-pulling ledger), reduce the overhead of it, and make it more available to everyone.

To further complicate #USLNG export approvals, #FERC review (authorizes siting & construction of LNG facilities) continues while #DOE review (approves export licenses) is paused. #LNG #ONGT

Think you’re maybe underestimating the political dynamic of a company 75% owned by the govt… do you think it would have been politically palatable to target below their subsoil use agreement levels given they are the entire lowest quartile of the cost curve and #uranium prices are at 15 year highs? The company has every incentive to announce targets in line with their government production agreements… hitting them would obviously be dependent on market dynamics (which, as we are seeing, are quite difficult at the moment). Guide to best case and if you miss, prices rise dramatically. You deliver into largely market related contracts and you’ll make record margins. It’s a huge win for $KAP assuming they haven’t gotten too short in the contract book - just maybeeee Twitter is fighting ghosts on this one and everything they are doing is extremely rational. Those are my (highly non-consensus) thoughts…

New LNG export permits are on pause because of climate change. Meanwhile, U.S. coal exports just hit a five-year high. reuters.com/markets/commod…

The fundamental problem with carbon management is that the politics are not great but the physics are also not great

CHART OF THE DAY: The two largest economies in Africa are under huge financial strain. Yesterday, Nigeria de facto devalued the naira by ~30% (after another ~30% devaluation in June). And Egypt is under pressure to devalue too, with the pound ~50% weaker in the black market.

According to the just-released California #LCFS stats for 3Q 2023, the volume of #SAF consumed in the state fell to 4.2 million gallons from 6.9 million gallons in the preceding quarter. The average CI score for SAF rose to 48.75 from 36.67 over the same period.

A Senior U.S. Official has told NBC News that the Biden Administration alongside Defense Officials are preparing for a “Military Campaign in the Middle East which could last for Several Weeks” and include Strikes on Iranian and Iranian-Backed Forces in Iraq and Syria as well as Cyberattacks against Targets likely located inside of Iran.

@FracSlap Pumped to see what's to come.

@NiyerClimate I like the idea, although I'm not sure we'd be happy with the outcome....

Something I’m thinking about a lot is data uncertainty in emissions inventories. The methane leakage problem is probably the most obvious example but so much of our fundamental data is stitched together with string and scotch tape. No measurements, huge error bars!

Going to keep this obscure to avoid controversy, but there are four related issues with the next steps for the 45V NPRM as Treasury seeks flexibility. Those are: - Energy storage - Curtailment - 5% freebie rule - "Annual aggregation" calculation Gotta bundle them coherently.