Legendary Trader Sees ‘Seismic Shift’ in Houston’s Oil Patch by Gerson Freitas Jr. and David Wethe, April 20, 2021, Yahoo Finance
(Bloomberg) — For John Arnold, the billionaire philanthropist who made his fortune betting on natural gas prices, Houston’s fossil-fuel industry seems finally ready to move on.
A year ago, talk in the Texas energy hub was mostly about defending oil and gas and denouncing renewables, Arnold, 47, said Monday on his Twitter account. Now, much of the discussion has shifted to clean-energy topics including wind, solar and batteries.
“Even those who are not ideological believers are taking the cues from the financial markets, which have no interest in oil production growth anymore,” said Arnold, the former head of natural-gas derivatives at Enron Corp.
He also said capital available to oil and gas has dried up while “every” private equity firm in Houston is raising money for clean energy. “The markets are rewarding those in a growth industry (zero carbon energy) vs one in secular decline.”
Arnold said the shift has made him more optimistic about the speed of decarbonization, which requires the scale and financial resources that large companies possess. “The fossil fuel industry has that expertise and is now focusing on a low carbon future.”
… “This is an example of the city of Houston leading in energy transition, and for the energy industry — our hydrocarbon companies, this is a seismic shift,” said Turner, who is chairman of the national nonprofit group Climate Mayors. “The recognition that we can’t continue to do business as we have done it in the past is sinking in.”
Arnold founded hedge fund Centaurus Advisors LLC in 2003 after leaving Enron, and the Houston-based fund gained fame betting against Amaranth Advisors LLC, which collapsed in 2006 after losing $6.6 billion on bad bets in the natural gas market. He closed the fund in 2012 at age 38 to pursue philanthropy with his wife Laura Arnold, a lawyer and former oil company executive, with the couple extending their influence through Arnold Ventures out of Houston. …
Oil Billionaire’s Low-Carbon Frack Dream Is Proving a Tough Sell by Daniela Sirtori-Cortina, Jonathan Gilbert and David Wethe, April 21, 2021, Yahoo Finance
(Bloomberg) — Billionaire Alejandro Bulgheroni’s dream of making fracking more environmentally friendly is running up against the reality of shale-patch economics.
The Argentine oil tycoon has pumped about $250 million into developing the technology behind Evolution Well Services, a Texas-based company that makes fracking equipment powered by natural gas produced at drillers’ wells instead of diesel that has to be trucked into fields. EWS has been in business for five years and has deployed seven crews in the U.S., well below its expectation of about 20 by now even as companies push to cut carbon footprints.
EWS’s conundrum illustrates the obstacles for so-called electric fracking, which faced concerns about costs even as it started gathering steam in earnest about two years ago. …
“Big companies have a large investment in this old technology, and they don’t want to or can’t make the switch until they finish amortizing their equipment,” Bulgheroni said in an interview. “As long as it’s an economic problem, it’s going to be very difficult to change.”
Frack crews have been returning to work over the past year, but they still total less than half the number at the height of the boom in 2018.
Bulgheroni, who made billions drilling for oil and gas over the last four decades and has built a wine venture on the side, still thinks the business can be successful as companies begin executing their environmental, social and governance plans. He said the EWS method prevents the burning of about 5 million gallons of diesel annually per frack crew. Last year, CNX Resources Corp. said it saved $2.4 million in fuel costs at one of its pads using EWS equipment.
A conventional fracking job involves using about 20 giant and noisy diesel-powered pumps, each the size of an 18-wheeler trailer, with fleets operated by a crew of about 30 people. In e-fracking, a small-diameter gas pipeline shuttles the fuel from the well to a turbine powering an electric motor.
Bulgheroni said his firm’s equipment can be operated with about half the staff of the conventional method.
Almost 10% of the roughly 200 frack fleets in the U.S. are powered by electricity rather than the conventional diesel engines, according to industry data provider Lium LLC. As many as 10 more fleets may be in the works, Daniel Cruise, a partner at Lium, wrote in an email.
But the price tag is holding back e-fracking. The estimated cost to buy a new conventional frack fleet is around $40 million, while the price for an electric equivalent is roughly 50% more, according to Lium. EWS’s equipment costs $50 million to $55 million, Bulgheroni said. It’s a tough pill to swallow for explorers and producers who have been hammered by investors to dial back spending and return more profits to shareholders.
“The biggest challenge for e-fleets so far has been the cost,” Cruise said. “Most E&Ps are still very cost sensitive and not yet willing to pay the (much) higher price needed to compensate for newbuilds.”
JPMorgan Chase & Co. noted in February that Halliburton Co., Liberty Oilfield Services Inc., NexTier Oilfield Solutions Inc. and ProPetro Holding Corp. are all running some form of ESG-friendly gear in the U.S. shale patch across Texas, whether fully electric frack pumps or dual-fuel equipment running off natural gas and diesel.
“Capital austerity between producers and servicers alike makes it difficult to see mass migration toward e-frac,” analysts at JPMorgan including Sean Meakim wrote in a note. “Instead, we continue to view dual-fuel as the most economic bridge to an electric fleet in the long run.”
Refer also to:
Frac’d to Hell NEBC, Rose Prairie: Explosive gas levels in *water* well kill $1.3 Million “potable” water station day before it was to open to the public. Taking bets: Will nature be blamed or frac’ers?
Nuclear reactors to steam Alberta’s aquifer-polluting tarsands is not clean or safe. Pretending so will be the ruse to make taxpayers pay, giving more corporate welfare to billion dollar profit-raping companies (while working to destroy public health and education). An unwise greedy idea, that will enable more tarshit shipping (needs toxic condensate), spills and use (risking life on earth).
Jim Cramer was right. It *is* happening really quickly. World first! New Zealand introduces legislation requiring banks, insurers and investment managers to report effects of climate change on their business. “This law will bring climate risks and resilience into the heart of financial and business decision making.”
Ovintiv/Encana, Chevron, Exxon et al deeply deserve this! CNBC’s Jim Cramer: “I’m done with fossil fuels … they’re just done. We’re starting to see divestment all over the world. … It’s going to be a parade that says, ‘Look, these are tobacco and we’re not going to own them.’ … Younger people don’t want to own them. The dividends are great…but you can tell that the world’s turned on them. It’s actually happening really quickly.”
Norges Bank blacklists CNRL, Cenovus (split from Encana – now Ovinvtiv – after Ernst lawsuit filed), Suncor and Imperial Oil from Gov’t Pension Fund Global for unacceptable carbon emissions in Alberta’s tarsands. Updated with tar-pimping by Ms. Southern and Alex Pourbaix, CEO Cenovus.
Starving polar bear eating oil executive by Stephanie McMillan
Why is LNG being pimped around the world to the tune of $Trillions as more and more investors & communities say no to frac’ing and fossil fuels? Calls into question motivations of gov’ts and companies–do they just want to assert power?
Myth of American energy independence based on willful deception “Alice in Wonderland” forecasts by U.S. EIA. Best way to con investors into losing $Billions! The Permian is flat lining, most frac’d shale plays “don’t amount to a hill of beans.”
NY State Pension Fund (3rd largest public pension in USA) blacklists tarsands companies: Imperial Oil, CNRL, Husky Energy, MEG Energy, Athabasca Oil, Japan Petroleum Expl Ltd. & Cenovus (Encana/Ovintiv spawn) for failing “to show they are transitioning out of oil sands production,” will sell off more than US$7 million in securities in these companies, will not make any further investments in them. Frac’ers to be evaluated next.
Wall Street tepid for frac’er Vine Energy Inc., carrying $1.22 billion in debt, led by past Encana execs. In 2020, Vine reported unadjusted $252.2 million in losses; refinancing unsecured notes due 2023 could prove challenging.
Major victory in 8-year fight to halt fossil fuel investments: University of Victoria, BC announces full divestment of quarter-billion-dollar working capital fund. More to go: Long-term endowment fund, valued at over $400 million.
Wise Norway wealth fund (world’s biggest) sold off entire oil patch portfolio by end 2020, addressing a key risk. The fund revealed $10bn loss on oil and gas holdings in 2020, had been valued at more than $40bn. Asset managers to hunt down investment opportunities in renewable infrastructure.
Another huge win for global movement to stop flow of money to big polluters with approval of $4Billion Fossil Fuel divestment. NYC Mayor Bill de Blasio: “Fossil fuels are not only bad for our planet and our frontline communities, they are a bad investment”
President European Investment Bank, Dr. Werner Hoyer: “Gas is over.” Oh, Oh! What’s gas frac’er Ovintiv/Encana gonna do? And, what’s Petro Pimp Jason Kenney gonna do? Fart bigger (after threatening USA with a tiny fart for wisely killing Keystone XL)?
Law-violating, aquifer-frac’er bully Ovintiv/Encana/(Cenovus spawned after Ernst lawsuit filed): “New York-based investor considers Ovintiv…to be the poster child for all that ails the North American exploration and production sector…. The sector as a whole is rife with excessive compensation and a lack of accountability”
Kids tried to sue Canada over climate inaction. They lost, Not for the courts to decide, Harper Gov’t appointed judge says. Kids plan to appeal. Bravo kids! I am grateful and in awe of you, but don’t expect “justice” to be served by our oil-soaked Supreme Court of Canada, or your Charter rights respected.
Frac Tank Reality Show: “Debt, Debt and Debt” and more debt; Judge-gifted bankruptcies to keep companies frac’ing & polluting and con investors into losing more money; Abandon thousands of frac harmed families; And intentionally dump pollution and clean-up on taxpayers. In the USA, “explorers burned through some $342 billion of cash since 2010, leaving little in the way of returns for investors.” In Alberta, AIMCo took $100s of millions (under Kenney & Harper, will likely take $billions more) from pensioners years ago to give to “quite leveraged” frac’ers already then.
Denton’s Law firm wanting more easy money? UCP Kenney’s Witch Hunt given another million dollars, making it look like just another AIMCo money laundering scheme. To pay Harper for his time puppeting Kenney? (Harper works at Denton’s and Witch Hunt boss Steve Allan’s son is partner there. Creepy.)
BlackRock Takes Command; “Literacy is Power,” meanwhile Alberta’s AIMCo Loses $4 Billion on bet gone wrong. Bet gone wrong or laundering (aka stealing) more money from ordinary citizens and pensioners to give to the rich?
Really Kenney? Canada’s worst economist ever? Steve Harper trashed our economy to serve China, Israel, the USA and big oil. I expect you know that, and that CAPP ‘n gang have your penis roped tight so that you give them everything they demand.
The Alberta gov’t and oil & gas industry are partners in a money laundering scheme. Just another massive subsidy ($100 million this time) to a multi-$billion profiting, horrifically abusive, lying, polluting, job decimating (by automation & greed) industry.
Jason Kenney is so full of shit, it’s a wonder he doesn’t spend all his time in the toilet. Teck does only smart thing possible given the pathetic economics and investors globally rejecting fossil fuels; Withdraws Frontier Tarshit project. Excellent, now Teck can clean up its toxic pollution in BC and heed court orders against the company.
JP Morgan leaked report has dire warnings for human race. Then, quit giving the fossil fuel sector so much money! JP Morgan was one of 33 financial institutions that gave estimated total of $1.9tn to fossil fuel sector between 2016 and 2018
Oil industry execs dead in the head with desperation? Parsley Energy CEO Matt Gallagher tries to bribe Gen Z with “dazzling BS” in a “shale new deal,” blames Wall Street, teens and our “perception” for its demise when industry’s greed is to blame.
Frac industry is damaging the oil & gas economy. When flipping for a profit fails, frac companies file for bankruptcy, which in turn deters lenders. “Wall Street has basically completely turned its back on the industry right now.” Is there anything frac’ing doesn’t damage?
Bank in Quebec, Caisse Solidaire, offers Oil-Free RRSPs! 250 professors, including from Calgary, ask Canadian universities to divest from petroleum industry. Laure Waridel: “One of the ways to put the economy at the service of the planet is to review the way we invest.”
Hanky Panky Power Pimping Codswallop! Canadian & BC gov’ts forcing demand for Site C dam? Why give the failing frac ‘n dash industry another near $Billion in corporate welfare? LNG & frac’ing, even electrified, are not green or clean or safe!
US EPA Releases Final Frac Report: Rosebud Alberta drinking water aquifers frac’d, water wells contaminated with gas. EPA’s late edits to 2015 draft frac report downplayed the risks, contradicted the evidence, called “bizarre” & “irresponsible.” Like Alberta regulator official, Steve Wallace, secretly editing “independent” drinking water contamination reports to protect illegal aquifer frac’er Encana?