After the Federal Reserve Bank energy conference, and in her deeper research about the energy transition’s contours, Michael Hopkins of Seeking Alpha interviewed Jennifer Warren. It’s the final installment about the Fed conference takeaways, but advances thought relative to current energy dynamics.
Michael Hopkins interviews Jennifer Warren, diving deeper into the energy transition (Concept Elemental, Jennifer Warren)
Below are some of the top-level thoughts connected to the slides:
Old energy sources don’t die, they just get added to. Critical minerals will be more demanded depending on the energy mix choices made.
Minerals for today’s energy (Payne Institute)
U.S. LNG is sought after in Europe and China. Texas will be playing a significant role. Europe will increase LNG imports 34% by 2024.
Europe’s natural gas imports (WSJ)
U.S. oil and gas firms are to benefit from Europe’s LNG diversification in natural gas supply.
U.S. LNG export facilities (EIA)
In a decarbonized world, oil would still require about $500 billion a year; we’re spending about $400 in 2022.
Cost of rapid decarbonization (Fed Energy conference)
New oil price forecasts since this one of November 10 suggest $80-$100 for 2023.
Oil price outlook (Rystad)
Government funding of new more sustainable ventures offer some interesting new investment options. Large incumbent firms of both oil and gas and electricity worlds will likely leverage these— the AESs (AES), Orsted (OTCPK:DNNGY), BP (BP), Iberdrola (OTCPK:IBDRY), Chevron (CVX), Exxon (XOM), etc.
Inflation Reduction Act (Bloomberg NEF)
This investment is already happening. Note that transportation electrification has been increasing.
New forms of energy (BloombergNEF)
What’s expected as a result of the IRA. It looks to me like there wouldn’t be the capacity builds were it not for increased subsidization.
Solar, wind, storage (BloombergNEF)
The IRA has $6 billion in clean fuels incentives.
Sustainable fuels (BloombergNEF)
Prospects for CCS and hydrogen.
CCS and hydrogen (BloombergNEF)
Oil market fundamentals still apply. We’re part of a global supply chain.
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