𝗛𝗼𝘄 𝘁𝗵𝗲 𝗛𝗲𝗮𝗱𝗹𝗶𝗻𝗲𝘀 𝗛𝗮𝘃𝗲 𝗖𝗵𝗮𝗻𝗴𝗲𝗱

A❤️437-word🧡under💛3-minute💚read.

Prior to Trump’s election, most headlines in my news feeds predictably focused on various clean energy technologies.

Today, the headlines are split between clean energy and fossil fuels. The following Axios headline illustrates the dramatic shift:

𝙉𝙖𝙩𝙪𝙧𝙖𝙡 𝙜𝙖𝙨 𝙩𝙝𝙧𝙚𝙖𝙩𝙚𝙣𝙨 𝙣𝙪𝙘𝙡𝙚𝙖𝙧 𝙙𝙚𝙢𝙖𝙣𝙙.

Think about that. First, it highlights the momentum behind nuclear, something unthinkable not long ago. Second, the focus isn’t on nuclear viability, it’s on nuclear competing with natural gas, not solar or wind.

Not music to the climate movement’s ears, but expect a boom in natural gas. On the flip side, oil could bust.

As the cleanest fossil fuel, a reemergence of natural gas isn’t the worst thing. I recently wrote that if all global oil and coal produced power generation had already transitioned to natural gas, global emissions levels would be far lower.

Also noteworthy, the nuclear versus natural gas issue isn’t one of cost or viability, it’s one of timing. Data centers need power now. Assuming gas turbine availability, natural gas can deliver it. Small nuclear reactors remain a decade or more away.

This quote from Grant Dougans, the power generation lead at Bain sums up the shift:

"Nuclear and gas. It's 'and' as opposed to 'or.' It's an additive story."

But what about “drill, baby, drill?”

The President is getting a crash course in the interconnectivity of the global economy. The action-reaction of the administration’s early moves have caused consternation in the oil patch as elucidated by another Axios article titled:

𝙒𝙝𝙮 𝙐𝙎 𝙤𝙞𝙡 𝙥𝙧𝙤𝙙𝙪𝙘𝙩𝙞𝙤𝙣 𝙘𝙤𝙪𝙡𝙙 𝙚𝙫𝙚𝙣 𝙜𝙤 𝙞𝙣𝙩𝙤 𝙧𝙚𝙫𝙚𝙧𝙨𝙚.

Simple: price.

Muck with economic growth and oil suffers. In some senses, oil’s supply/demand curve is contrived. Supply doesn’t dictate price. The amount of the supply producers decide to pump does. Except that when demand declines due to an economic slowdown, producers scurry to maintain revenues while sacrificing margins.

That’s where we’re at today.

Unlike the Saudis who enjoy the world’s lowest cost of pumping, U.S. producers minimally need prices above the $50-$60 range. Below $50, many if not most U.S. producers lose money on every barrel.

Even before the administration’s bout of schizophrenia, demand for oil wasn’t robust. The most recent oil outlook from the Energy Information Agency’s predicted growth of 2.2% this year and a paltry 0.4% in 2026.

S&P Global Commodity Insight is projecting a modest 150,000 barrel-per-day increase for lower 48 states onshore wells. However, if prices fall below $50, over the next 12 months, they say production could drop by over one million barrels per day.

Climate advocates should take solace in that possibility because the news in the next four years isn’t likely to get much better.

#oilandgasindustry #oilandgas #nuclear #nuclearenergy