“Why The Number One Global ESG Goal Should Be Energy Surplus” Featuring Rob West, Thunder Said Energy

For this week's session, we were thrilled to welcome back Rob West. Rob is the lead analyst at his own firm, Thunder Said Energy. Rob had a career in research at Redburn and Sanford C. Bernstein before leaving to start Thunder Said in 2019 and first joined us for COBT on January 4, 2022. He has immersed himself in the technology details of the energy transition and brings a unique "how are we going to accomplish all of this" perspective to all of his analysis. Even though there are immense challenges, and we have dug ourselves in a hole in many ways, hang in there as you will hear Rob's optimism in particular towards the end of the discussion. Rob joined us today from his home in Tallinn, Estonia. In our conversation, we pull from Rob some thoughts on the Russia-Ukraine war and delve into the sentiment in Eastern Europe and the Baltics about Russia's aggression.

Rob recently wrote a research piece entitled "Energy Shortage: Fear in a Handful of Dust?" At the heart of the paper is that the road to a better world, including a successful transformation of our energy system, goes through having energy "surplus" and not through energy "shortage." Quite the contrary, he points out the dangers of energy shortage in a number of areas including higher food prices, the negative climate effects of more wood use, diminished economic prosperity, reduced security, and the instability of democracies during periods like the one we are in. Rob reminds us of the serious bottlenecks to be solved, the second law of thermodynamics (and the implications for energy loss), that we need energy to build new energy systems, and the importance of innovation. In total, Rob points to ten key reasons why the world needs energy surplus, and why such surplus not only helps us achieve our environmental goals, but also helps us avoid a world that would ultimately be more dangerous and also more painful, especially for those who have less.

To kick us off, Mike Bradley took a look back at what oil and gas prices looked like in January of 2022 when Rob last joined us and shared current bond, commodity, and equity performance. He noted that the last few days of energy equity volatility was predominately related to the direction OPEC might pursue at its December meeting and wrapped up his discussion by laying out both the failure and success coming out of COP 27. Colin Fenton noted the European Union has put a number on its proposed price cap for natural gas: €275 per MWh, as measured by the TTF month-ahead price in the Netherlands. The proposed cap would begin on January 1, 2023, last for one year, and activate only in the event of emergency conditions locally, as determined by the spread between spot prices in Europe and a basket of spot LNG prices from around the world. EU Member States would need to approve the proposal before it could take effect. Veriten's head of nuclear research and strategy, Brett Rampal, also joined the team today.

As we pause and reflect about Thanksgiving, we want to wish you all the best and reiterate how grateful we are for your friendship. Be on the lookout for a special message on Thanksgiving Day!

Thank you again to Rob for joining and thanks to you all!