“Reducing coal consumption is an incremental process.” That’s how China’s Foreign Ministry spokesman put it, explaining the change in the COP26 Climate Summit’s language for coal from “phase out” to “phase down.”
Without a doubt, support for de-carbonizing energy has never been greater on the part of governments, investors and industry. But oil, natural gas and coal also currently provide more than 80 percent of the world’s still-rising energy needs.
Even “phasing down” is going to take decades, trillions of dollars of investment and some major technological advances. And so long as the world relies on fossil fuels—as it almost certainly will for decades—whatever discourages investment in them will drive up prices.
Despite some setbacks, Kinder Morgan Inc. (NYSE: KMI) has adapted to where we are right now in the energy price cycle. But effective participation still requires discipline.
Too many small owners lacking critical scale and unprecedented roadblocks to new energy pipeline infrastructure: That’s what was at the core of the unprecedented wave of US oil and gas midstream dividend cuts and bankruptcies of the past few years. Now those same forces are spawning something considerably more positive for investors
There may come a day when US transportation is 100 percent electrified and homes are heated with blended hydrogen. But in the here and now, oil and gas pipelines are essential infrastructure. Exhibit A is the havoc wreaked by the successful hack of systems at the Colonial Pipeline this month.
Even without a repeat of the company’s Q1 windfall, the benefits to Kinder Morgan Inc.’s (NYSE: KMI) underlying business and balance sheet are likely to continue flowing throughout the rest of 2021 and beyond.
Shale exploration and production (E&P) giant, Pioneer Natural Resources (NYSE: PXD) announced a deal to acquire privately-held DoublePoint Energy, but the reception on Wall Street has been less than enthusiastic.
In a typical energy cycle, rising demand and higher prices eventually lead to increased production. That in turn means a volume boost for midstream and downstream systems, from gathering pipes and processing facilities near the wellhead to pipeline and storage systems that deliver crude oil to refineries, and from there to consumers and businesses.
By on Nov. 22, 2021
Two companies previously on our Endangered Dividends List have announced cuts since the previous issue of EIA. Phillips 66 Partners’ (NYSE: PSXP) unitholders will see their quarterly payments reduced to 46 cents a share, a -47.4 percent haircut from the current 87.5 cents.
May 2019 was a tough time to launch our High Yield Energy Target List, on the eve of the historic collapse of oil and gas prices. But 30 months in, we’re at a decidedly better place in the energy cycle. Our paper losses have become big gains. In fact, we’re at a point that justifies shuffling the deck a bit in favor of increasing yield.
As noted in the portfolio update this week, our only oil and gas services recommendation in the model portfolio right now is Schlumberger (NYSE: SLB). That’s been the right move as shares in SLB are the top-performing of the Big 3 services names over the past year.
Elliott and Roger on Nov. 30, 2021
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