Capital Depreciation

O&G Investing

[Capital Depreciation @CapDepreciation]

@MLPguy @PlainviewEnergy did a good deep dive on the potential synergies here

[John Arnold @johnarnold]

Remarkable that in half a lifetime the process of acquiring knowledge went from encyclopedias and the Dewey Decimal System to Google search and AI chatbots.

[Capital Depreciation @CapDepreciation]

@Oliver_Trpcic @Kevin_AGraham Your trade desk had AI power demand and the LNG boom modeled out in 2010? 🤡

[Capital Depreciation @CapDepreciation]

@Midlandistan Not if there isn’t physical infra to support the supply increase?

[Capital Depreciation @CapDepreciation]

I don’t agree to the full extent of his view, but I feel like ppl did not listen to his actual argument. He’s not saying there’s not enough gas in the ground, just that there’s not enough infra to support supply growth and lead times are too long fix that quickly

[Patrick OShaughnessy @patrick_oshag]

Matthew Smith has spent the last 18 months modeling every well, pipeline, storage facility, and power plant in the American natural gas system.

His conclusion is that the US is heading toward a natural gas shortage with no precedent, beginning in 2028.

By 2030, he believes we could exhaust our working natural gas storage entirely.

The fuel everyone in AI is counting on, and that everyone assumes is abundant, is not there.

And because gas sets the price of electricity in most of the country, he argues Americans will pay for the shortage in their power bills.

Matthew has worked in energy markets for over 20 years and is the CIO of Chronometer Partners.

This is his second time on the show, and he's one of my favorite people to talk to about energy.

We discuss:
- Why the bottleneck is moving from power to fuel
- Why we can't just shut off exports
- 2028 as the inflection point
- Large-scale nuclear v. SMRs
- Who wins, who loses, and what can still be done

Enjoy!

TIMESTAMPS
0:00 Intro
1:30 What Drives the Deficit
11:00 Why Supply Can’t Catch Up
20:35 The 2030 Gas Crisis
25:05 Winners and Losers
29:00 Nuclear and Solar
33:30 Consumers Pay the Bill
37:20 AI’s Next Shortage
45:25 Solutions and Global Stakes
51:15 The Coming Gas Knife Fight

[Capital Depreciation @CapDepreciation]

@WAR527 I agree. High valuation, sure, but WFE has mainly targeted the EF rather than Austin Chalk. If MGY can replicate their Chalk results on this acreage, it’ll be a clear home run.

[Capital Depreciation @CapDepreciation]

@Midlandistan If prices aren’t high enough to justify expanding takeaway, then how is supply going to increase infinitely? Some of these interstate gas pipelines expansions require $2/mcf rates. Producers/utes need significantly higher prices to justify signing up for that capacity

[Capital Depreciation @CapDepreciation]

@ShaleTier7 Now do interstate pipes…

[Capital Depreciation @CapDepreciation]

@John_USA_1971 @patrick_oshag You can’t just take the nameplate capacity of every project and add it up. That’s not how it works. If you build a 1bcd pipeline from the Permian to Agua Dulce and then another 1bcfd from Agua Dulce to Houston, that only supports 1bcfd of production, not 2.

[The Kobeissi Letter @KobeissiLetter]

This is truly unfortunate:

In 2022, JetBlue had agreed to merge with Spirit Airlines in a $3.8 billion transaction.

This was intended to end Spirit's imminent bankruptcy and employ the majority of Spirit's 17,000 employees.

One year later, in 2023, the US Department of Justice sued to block the merger, saying it would reduce competition and drive up fares.

Fast forward another 2 years to today, and Spirit has officially gone bankrupt, ceased operations, and 17,000 people are now unemployed.

And, tens of thousands of Spirit passengers are now "stranded."

The worst part?

The "reduced competition" that the DOJ thought they were avoiding by blocking the transaction has only gotten worse.

There quite literally is no competition in the space anymore.

This will go down as one of the biggest transactional failures in US history.

[nikki mccann ramírez @NikkiMcR]

Its actually so fucking stupid that instead of hammering the president and party with a historically low approval into the dirt on actual issues we’re now on week 3 of “is this twitch streamer doing thought crimes” discourse

[Will 🦥 Menaker @willmenaker]

@mattyglesias Aren't you Matt Yglesias?

[Capital Depreciation @CapDepreciation]

@EnergyCynic @pickeringenergy Why won’t it be able to keep the strait closed? If anything it will just further incentivize countries to go against US sanctions and buy Iranian oil the more they keep the pressure on.

[Capital Depreciation @CapDepreciation]

@Suicide95518428 Their 2025 guidance made no sense to begin with. I had to make some crazy assumptions in my model to hit it (ex. Assume they quadruple the amount of butane they blend 🤣 ). So curious what their assumptions were.

[Spencer Althouse @SpencerAlthouse]

Bad Bunny naming dozens of countries in the Americas and then holding up a football that reads "together we are America"....such an iconic Super Bowl performance wow

[JJ Watt @JJWatt]

Did I understand a single word of it?
I did not.

Was it a vibe?
It was.

[Capital Depreciation @CapDepreciation]

@TheStalwart You can say the same about vibe coding an app that measures orality

[Tim Miller @Timodc]

I’m not easily shook these days but the number of people who think the appropriate punishment for not following a masked federal agent’s orders is assassination is rather shocking

[Chet @NoCapCapitalLLC]

I wonder how much ad money it took to pay for the damage this fear mongering and grift campaign will have on his rep moving forward

[Capital Depreciation @CapDepreciation]

@EnergyCredit1 The book specifically called out how they jokingly referred to the SpinCo as “ShitCo”. Will try to find it, but until then you can lay claim 🤣