In Energy

The intersections of energy and our new President have met for the first time this week – like a pair of semis hitting each other at 70 miles per hour.  I’m talking about the “Energy Independence” executive order signed by the President on Tuesday, rolling back EPA carbon directives to utilities and freeing coal drilling on public lands.

Trump made a big deal out of coal during the election, promising big job gains for out-of-work miners in the areas that clinched him the election in West Virginia, Ohio and Pennsylvania.  And turning back the Obama EPA clean energy initiatives is certainly a quick and easy way for Trump to try and make good on that promise.

Trouble is, it won’t do a thing for coal.  Trump is battling modern forces here – globalization that is killing jobs in the Rustbelt that he’s promised to bring back, mechanization ending manufacturing jobs that he’s pledged to reverse, and natural gas and renewables technologies that are moving the global energy economy away from coal – Paris Climate Accords notwithstanding.

Trying to reverse our energy economy back towards coal is like Presidents Wilson, Coolidge, and Hoover in the 1920’s and 30’s promising to end the swell of ‘horseless carriages’ and ‘gas-less lanterns’ and move us back to burning wood and riding horses.

US utilities must plan on electricity needs for their grids decades into the future – and none of them are about to abandon the slow but inevitable changeover from coal just because a backwards-thinking President with a four-year lifespan is looking to turn back the clock.   CHECK OUT THIS MAP if you don’t believe me.

For my other must reads this week:

READ THIS and see why the horrors for offshore oil and gas producers are far, far from over. In US shale, we’ve witnessed more than 100 bankruptcies – although most of them continue to operate.  In offshore, the problems are even direr as huge contracts for unbuilt rigs undertaken when times were good are now coming due.  Restructurings have just begun and with the offshore cycle not expected to fully revive until 2020 (!!??!!), there’s still a major mess to come.  AVOID!

Finally, CHECK OUT this video of your hero on Bloomberg last Monday morning.  I outline my take on the upcoming OPEC meeting in June – but that’s not the really interesting part.  Jon Ferro asked me about bearish sentiment, and I answered talking about current bearish sentiment in the oil markets.  What I didn’t realize was that Jon was trying to understand the two-year long bearish sentiment, despite many OPEC and oil producer victories, including a production cut and a very pro-energy election of President Trump.  That’s a much more interesting question of group think in oil trading – worthy of a book from me.  It really is a fascinating topic to tackle on how markets work and where the greatest opportunities for investors emerge. I wish I had understood the question correctly, it would’ve been an interesting conversation.

Instead of that one, join me in our OWN conversation on energy and energy stocks in my interactive webinar – NEXT LIVE SESSION:  April 10th at 4PM.

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