the Plug

I tweet about energy, through the lenses of policy, finance, and geopolitics. The newsletter linked below is where I share longer-form content. 👇

[the Plug @thePlugWeekly]

1/n After a series of client meetings these past weeks, a recurring theme has emerged on the US energy “transition.”

Investors seem overly focused on variable costs for new energy tech right now. Not enough attention is being paid to capex, cost of capital, and build time.

🧵

[Ira Joseph @ira_joseph]

@BrianGitt “Only?” How can a SMR technology that does not actually operate in the world provide the only practical solution? I’m all in on the concept; let’s just see one operate 1st before we hand over the future of the data center business to it. And let’s see how low cost it actually is.

[the Plug @thePlugWeekly]

@wilson_ricks This was a fantastic thread. Thanks for sharing, and for saying what no one else has been bold enough to.

[Wilson Ricks @wilson_ricks]

The CA agencies provided no analysis in support of their bold claims, because no actual study would back them up.

So this is essentially just a set of states using 'trust me bro' as justification for warping a half-trillion dollar federal program in their favor.

[Rory Johnston @Rory_Johnston]

Anyone else remember how we were supposed to have a supply-driven super cycle and then OPEC+ cut production by 5 MMbpd and we traded sideways for a year?

[Rory Johnston @Rory_Johnston]

I’ll take the other side of this bet.

[Andrew Leach 🇨🇦 @andrew_leach]

PMPP looking more likely with every passing day.

[the Plug @thePlugWeekly]

@MikeUmbro You had me excited for you brother… the last line brought me back down to reality

[Rory Johnston @Rory_Johnston]

🛢️ WHAT'S COMMODITY CONTEXT? 🛢️

Many new subscribers and it had been *ages* since I last updated the About page.

Here's a [re]introduction of myself and what you can expect from my oil market research at Commodity Context

Read more: https://t.co/6odlY3ineG

[Xan Fishman @XanFishman]

Energy nerds, you don’t get the night off. There’s a whole energy title in the Immigration/Security bill. (Pages 24-29 in the bill text). Spoiler alert: nuclear.

[Lyn Alden @LynAldenContact]

Nigeria's currency has lost 2/3rds of its value relative to USD over the past year.

Anyone holding domestic cash/deposits had their savings greatly devalued, and everyone who is paid in the local currency who can't negotiate a tripling of their income has less purchasing power.

There are 160+ currencies in the world, with each one being a centralized ledger. Many of them lose value rapidly, with this being the most recent example, affecting 200+ million people.

Since the currencies are all localized monopolies, people historically had little choice other than to denominate contracts and savings in them, and keep getting rug-pulled.

The wealthy often have more avenues to get foreign bank/brokerage accounts to hold value elsewhere, while the less wealthy often have fewer ways to get out of the repeated rug-pulling with whatever modest savings they have.

Technologies like bitcoin for the long term and stablecoins for the intermediate term give me people more options. They take what was once mostly accessible to the wealthy (more solid value outside of the control of the local centralized rug-pulling ledger), reduce the overhead of it, and make it more available to everyone.

[Susan Sakmar @SusanSakmar]

To further complicate #USLNG export approvals, #FERC review (authorizes siting & construction of LNG facilities) continues while #DOE review (approves export licenses) is paused. #LNG #ONGT

[Art Hyde @JekyllCapital]

Think you’re maybe underestimating the political dynamic of a company 75% owned by the govt… do you think it would have been politically palatable to target below their subsoil use agreement levels given they are the entire lowest quartile of the cost curve and #uranium prices are at 15 year highs? The company has every incentive to announce targets in line with their government production agreements… hitting them would obviously be dependent on market dynamics (which, as we are seeing, are quite difficult at the moment). Guide to best case and if you miss, prices rise dramatically. You deliver into largely market related contracts and you’ll make record margins. It’s a huge win for $KAP assuming they haven’t gotten too short in the contract book - just maybeeee Twitter is fighting ghosts on this one and everything they are doing is extremely rational. Those are my (highly non-consensus) thoughts…

[Steve Everley @saeverley]

New LNG export permits are on pause because of climate change.

Meanwhile, U.S. coal exports just hit a five-year high.

https://t.co/DJ5NJt0HuB

[Jack Andreasen Cavanaugh @AndreasenJack]

The fundamental problem with carbon management is that the politics are not great but the physics are also not great

[Javier Blas @JavierBlas]

CHART OF THE DAY: The two largest economies in Africa are under huge financial strain.

Yesterday, Nigeria de facto devalued the naira by ~30% (after another ~30% devaluation in June). And Egypt is under pressure to devalue too, with the pound ~50% weaker in the black market.

[Corey Lavinsky @biofuelslaw]

According to the just-released California #LCFS stats for 3Q 2023, the volume of #SAF consumed in the state fell to 4.2 million gallons from 6.9 million gallons in the preceding quarter. The average CI score for SAF rose to 48.75 from 36.67 over the same period.

[OSINTdefender @sentdefender]

A Senior U.S. Official has told NBC News that the Biden Administration alongside Defense Officials are preparing for a “Military Campaign in the Middle East which could last for Several Weeks” and include Strikes on Iranian and Iranian-Backed Forces in Iraq and Syria as well as Cyberattacks against Targets likely located inside of Iran.

[the Plug @thePlugWeekly]

@FracSlap Pumped to see what's to come.

[the Plug @thePlugWeekly]

@NiyerClimate I like the idea, although I'm not sure we'd be happy with the outcome....

[Dashboard American @NiyerEnergy]

Something I’m thinking about a lot is data uncertainty in emissions inventories.

The methane leakage problem is probably the most obvious example but so much of our fundamental data is stitched together with string and scotch tape. No measurements, huge error bars!

[Dashboard American @NiyerEnergy]

Going to keep this obscure to avoid controversy, but there are four related issues with the next steps for the 45V NPRM as Treasury seeks flexibility.
Those are:
- Energy storage
- Curtailment
- 5% freebie rule
- "Annual aggregation" calculation

Gotta bundle them coherently.