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Re: R48...outlook on ENERGY SECTOR


@Bizman wrote:

Holy Cow!  Look at this headline for a lazy Sunday from the WSJ!

Companies Cancel Atlantic Coast Pipeline After Years of Delays

https://www.wsj.com/articles/companies-cancel-atlantic-coast-pipeline-after-years-of-delays-11593975...

Berkshire and BAM are apparently involved in a deal with Dominion to buy much/most of its midstream business.  Be interesting to see what this does to the dividend.

Makes you wonder if another pipeline will ever be built in the US, other than perhaps in Texas.  What about Line 3 in Minnesota for Enbridge.  Not sorry I'm not involved there.


I wonder where the ESG crowd thinks all the new energy Sources to power the work at home economy is going to come from if no new gas lines are installed. There are no plans to build new US nuke plants. The 2 Indian point nuke plants on the Hudson that supply 25% of NYC electricity will be shut down in 2021-2 by the NY Governor and there are no plans to replace all their power even as AAPL, AMZN, Goog and MSFT enlarge their presence in NYC and increase demands for more power. NYC residents and businesses are going to wake up and find that the High cost of electricity increased by 25% + because the remaining electricity co will be able to charge more. And residents of high tax blue States will have to shell out more $ to pay for expensive nuke power that is not profitable. Every retail electricity customer in NJ pays a $6 a month surcharge to subsidize High operating cost of 2 nuke power plants in the state which delivers $300 M to the utility that owns the plants. Customers in NY also pay a similar surcharge.

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Re: R48...outlook on ENERGY SECTOR


@Intruder wrote:

@Bizman wrote:

Holy Cow!  Look at this headline for a lazy Sunday from the WSJ!

Companies Cancel Atlantic Coast Pipeline After Years of Delays

https://www.wsj.com/articles/companies-cancel-atlantic-coast-pipeline-after-years-of-delays-11593975...

Berkshire and BAM are apparently involved in a deal with Dominion to buy much/most of its midstream business.  Be interesting to see what this does to the dividend.

Makes you wonder if another pipeline will ever be built in the US, other than perhaps in Texas.  What about Line 3 in Minnesota for Enbridge.  Not sorry I'm not involved there.


I wonder where the ESG crowd thinks all the new energy Sources to power the work at home economy is going to come from if no new gas lines are installed. There are no plans to build new US nuke plants. The 2 Indian point nuke plants on the Hudson that supply 25% of NYC electricity will be shut down in 2021-2 by the NY Governor and there are no plans to replace all their power even as AAPL, AMZN, Goog and MSFT enlarge their presence in NYC and increase demands for more power. NYC residents and businesses are going to wake up and find that the High cost of electricity increased by 25% + because the remaining electricity co will be able to charge more. And residents of high tax blue States will have to shell out more $ to pay for expensive nuke power that is not profitable. Every retail electricity customer in NJ pays a $6 a month surcharge to subsidize High operating cost of 2 nuke power plants in the state which delivers $300 M to the utility that owns the plants. Customers in NY also pay a similar surcharge.


You can count on Governor Cuomo and his lefty friends to create circumstances that cause brownouts and blackouts and then blame and fine the utilities for the problems.  Just like he did with National Grid and the pipeline issues in NY state.  Made them ship in LNG in trucks and keep connecting people to nat gas hookups even though they couldn't build the pipe to increase supply!

Being a lefty means never having to say you are sorry or take responsibility for the consequences of your actions.  

As we likely move from one brand of lunacy to another this fall, we can count on the media to miss the bad effects of the cause and effect of environmental extremism and poor economics.

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Re: R48...outlook on ENERGY SECTOR


@Bizman wrote:

@retiredat48: I am sympathetic to your views.  

But I am gun-shy on energy and currently out.  The closest I have to energy exposure is the midstream exposure D & DUK possess through the likes of the Atlantic Coast Pipeline.  Even that seems likely to be fought tooth and nail by the environmental crowd.

Just to play devil's advocate, assume a Biden win and a Democratic Sweep in the Senate.  What then?  What about the prospects for a big carbon tax, rejoining the Paris Climate Confab, the Green New Deal, and AOC as Secretary of Energy?

No concerns?


Hi Bizman...my posture is the same as my original post opening this thread:  NO ACTION...WAIT...PATIENCE.

I posted "During next year, Energy Co dividends will be cut; watch for all the bankruptcies.  But consider, the oil is always owned by someone.  Production will get below demand usage.  Oil prices return, if not go way up.  Companies start increasing dividends.  Energy stocks may zoom!  Or, as a minimum,  be a great dividend-paying holding for retirees...far better than 1%, 30 year US Treasury bonds."

All the negatives will ensue.  Indeed, we have witnessed new energy company bankruptcies.   Maybe the industry shrinks by 50%.  But history shows that when this happens, a few companies (usually with good balance sheets), will emerge even stronger.  And if that be Exxon or Chevron, accompanied by a great dividend yield as well.  In fact, I don't know why Exxon just doesn't suspend most CapX spending exploring for new oil; just grab up the oil from current bankrupt companies.  I also consider the ESG sales by fund managers will take another year or more to purge "energy".

However, there will still be several decades or more need for and demand for oil.  Including chemical business (think making plastics). 

So I observe and wait...at least to after the election in Nov (unless bear market drives prices to new lows). 

R48

 

 

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Re: R48...outlook on ENERGY SECTOR


@xray wrote:

Bizman:

 Biden is no shoe in but neither is President Trump at this point in time [IMHO]. The news stations, newspapers, and internet are doing a good job at showing President Trump's current deficiency's [as well as wearing the facemark or not] and keep pushing the problems. With the conservative stations not broadcasting to their base [like the Democrats] they are not getting a opposing view. It appears that the media is currently pushing any new problem that occurs daily that will just make the election a "toss up" [like the previous election with Hillary]. Should Biden win [which is always a possibility in our changing times], and the House/Senate go democratic, then the energy sector will continue to be out of favor for some time [going forward].  With that said....

 The energy sector, according to my [sole] analysis, is currently out of favor [Shale industry collapsing] and is considered "dead money" at the current time. Many of us, I am sure, have "some securities" in the energy sector on our "Watch List" and ready to pull the levers on them if/when the opportunity [and economy] presents itself....

 Disclosure: Currently some of us have only 2% of portfolio [with a single security investment] invested in the "Energy Sector"....
One single opinion of the many I am sure....


You do realize that the only way there can be an economic recovery in the US is if there is a dramatic increase in the consumption of fossil fuel. Same with the global economy which trades with the US. When US economy is in full recovery mode oil consumption is About 20 million barrels a day -45% for gas, 25% for diesel and 10% for jet fuel. Doesn’t matter if energy sector is out of favor, people have to drive to their jobs and trucks have to make deliveries. Natural gas provides 38% of energy for US electricity and is cheap because its home grown. Natural gas will replace expensive nuke power and polluting coal at a lower cost.

15% of the earth’s population, 1.2B people, live without electricity and every emerging market nation has pledged to provide electricity to their residents which can only occur if coal and gas are used to generate electricity because they are the cheapest fuels available.

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Re: R48...outlook on ENERGY SECTOR


@retiredat48 wrote:

@Bizman wrote:

@retiredat48: I am sympathetic to your views.  

But I am gun-shy on energy and currently out.  The closest I have to energy exposure is the midstream exposure D & DUK possess through the likes of the Atlantic Coast Pipeline.  Even that seems likely to be fought tooth and nail by the environmental crowd.

Just to play devil's advocate, assume a Biden win and a Democratic Sweep in the Senate.  What then?  What about the prospects for a big carbon tax, rejoining the Paris Climate Confab, the Green New Deal, and AOC as Secretary of Energy?

No concerns?


Hi Bizman...my posture is the same as my original post opening this thread:  NO ACTION...WAIT...PATIENCE.

I posted "During next year, Energy Co dividends will be cut; watch for all the bankruptcies.  But consider, the oil is always owned by someone.  Production will get below demand usage.  Oil prices return, if not go way up.  Companies start increasing dividends.  Energy stocks may zoom!  Or, as a minimum,  be a great dividend-paying holding for retirees...far better than 1%, 30 year US Treasury bonds."

All the negatives will ensue.  Indeed, we have witnessed new energy company bankruptcies.   Maybe the industry shrinks by 50%.  But history shows that when this happens, a few companies (usually with good balance sheets), will emerge even stronger.  And if that be Exxon or Chevron, accompanied by a great dividend yield as well.  In fact, I don't know why Exxon just doesn't suspend most CapX spending exploring for new oil; just grab up the oil from current bankrupt companies.  I also consider the ESG sales by fund managers will take another year or more to purge "energy".

However, there will still be several decades or more need for and demand for oil.  Including chemical business (think making plastics). 

So I observe and wait...at least to after the election in Nov (unless bear market drives prices to new lows). 

R48

 

 


Thanks for the reply R48 and sorry for my poor reading comprehension.  Hopefully we can find a fairly obvious buy point that even I can't miss!

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Re: R48...outlook on ENERGY SECTOR


@Intruder wrote:

@xray wrote:

Bizman:

 Biden is no shoe in but neither is President Trump at this point in time [IMHO]. The news stations, newspapers, and internet are doing a good job at showing President Trump's current deficiency's [as well as wearing the facemark or not] and keep pushing the problems. With the conservative stations not broadcasting to their base [like the Democrats] they are not getting a opposing view. It appears that the media is currently pushing any new problem that occurs daily that will just make the election a "toss up" [like the previous election with Hillary]. Should Biden win [which is always a possibility in our changing times], and the House/Senate go democratic, then the energy sector will continue to be out of favor for some time [going forward].  With that said....

 The energy sector, according to my [sole] analysis, is currently out of favor [Shale industry collapsing] and is considered "dead money" at the current time. Many of us, I am sure, have "some securities" in the energy sector on our "Watch List" and ready to pull the levers on them if/when the opportunity [and economy] presents itself....

 Disclosure: Currently some of us have only 2% of portfolio [with a single security investment] invested in the "Energy Sector"....
One single opinion of the many I am sure....


You do realize that the only way there can be an economic recovery in the US is if there is a dramatic increase in the consumption of fossil fuel. Same with the global economy which trades with the US. When US economy is in full recovery mode oil consumption is About 20 million barrels a day -45% for gas, 25% for diesel and 10% for jet fuel. Doesn’t matter if energy sector is out of favor, people have to drive to their jobs and trucks have to make deliveries. Natural gas provides 38% of energy for US electricity and is cheap because its home grown. Natural gas will replace expensive nuke power and polluting coal at a lower cost.

15% of the earth’s population, 1.2B people, live without electricity and every emerging market nation has pledged to provide electricity to their residents which can only occur if coal and gas are used to generate electricity because they are the cheapest fuels available.


+1.

Will be interesting to see, that with the massive usage decline due Covid, the energy companies (worldwide) maybe can get production barrels below usage, when consumption returns, even if lower than pre-Covid levels.

Need discipline...

R48

 

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