Energy Prospectus

Former Enbridge CEO Daniel sees possible re-application for Keystone XL

Former Enbridge CEO Patrick Daniel told BNN today that he is believes Donald Trump’s victory will be positive for cross-border energy pipeline projects, starting with the Keystone XL pipeline, the final application for which was turned down by the Obama administration a year ago after seven years of permitting activity.

Daniel told BNN that Trump’s presence in the Oval Office should “slice through the red tape ensnaring projects like TransCanada’s (ticker: TRP) Keystone XL.”

http://www.oilandgas360.com/positive-ne ... S_Campaign

Note below from a contact of mine in Dallas on Trump's energy policy.

Make America energy independent, create millions of new jobs, and protect clean air and clean water. Conserve natural habitats, reserves, and resources, and unleash energy revolution.

Unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves. Become, and stay, totally independent of need to import energy from OPEC, or any nations hostile to our interests. Open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits. Encourage use of natural gas and other American energy resources that will reduce both emissions and the price of energy and increase economic output.

Rescind all job-destroying executive actions from Obama, and reduce or eliminate all barriers to responsible energy production.

Back in September, Trump gave you a roadmap to his energy policies, saying:

We will use our vast coal, shale gas, and other American energy sources in a clean and appropriate manner to benefit American families and workers, not for the economic benefit of his energy politically-connected. Support coal jobs, safe fracking, energy from offshore and public lands, and the Keystone Pipeline, which can be done responsibly.

Winners, the Losers, and Downright Profitable

winner it’ll be drillers in U.S. eagerly awaiting rally in crude prices. After all, we’re talking about an industry that Trump has called the lifeblood of America — and he wasn’t wrong!

Not only will they be unhindered during Trump administration that repeatedly said there should be less regulation on energy, but companies are ready to turn on the taps. Granted, that won’t occur until oil prices find more support above $50 per barrel, but there are more fundamental reasons to stay bullish.

For starters, keep in mind that demand is going nowhere but higher over the next few years. We’ve been moving away from a bottom since prices reached as low as $26.21 per barrel back in February.

Yet more pressure could come from Saudis and throw a wrench in the works. House of Saud is feeling a few jitters with a pro-tight oil/shale president being sworn in January. It’s a legitimate fear Saudis will use this as an excuse to derail any output deal being formalized.

Saudis are nearly at a breaking point. Cheap oil caused desperately needed revenues to plummet. Saudis canceled $266 billion in projects. Saudi Kingdom is strapped for cash, having to delay billions of dollars of payments to construction firms and other contractors.

If oil falls below $30 per barrel, it’s only a matter of time before OPEC collapses. The market isn’t fooled as to who will come out on top during a Trump presidency. I actually feel bad for anyone that shorted the market overnight out of fear.

Crude climbed above $45 per barrel, and stocks across sector are rebounding higher.

I’m still not buying coal stocks.

Please explain how this plan differs from the binge funding bankers supplied to shale developers
that. with the Saudis' binge production + frantic global competition, crippled the industry and
drove many good companies into bankruptcy. The plan promises to exacerbate the industries'
propensity for vicious boom/busts. Seems like a cynical disaster for pricing power. It will be
different this time? How?

<<Unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves, plus hundreds of years in clean coal reserves. Become, and stay, totally independent of need to import energy from OPEC, or any nations hostile to our interests. Open onshore and offshore leasing on federal lands, eliminate moratorium on coal leasing, and open shale energy deposits. >>

In the past you've called this "total independence" talk total hogwash. How is it different now?

The U.S. will never be totally independent when it comes to oil. We can produce 100% of our coal and natural gas necessary for power generation, but never enough oil. We will always be an importer of oil.

It will be good for the industry if the government is more supportive of business in general. Repeal of Obamacare will be a good first step.

Dan, I'm afraid you dodged the hard economic question. The Trump plan seems to repeat the bubblenomics that brought about this catstrophic bust for us and the companies we invest in. It makes sense as a political gimmick to keep consumer prices low, but it would exacerbate the industry's propensity for brutal boom/bust finance. This sounds like a scheme to goose Wall St and the banks and SUV sales. Saying Washington should be nice to energy executives doesn't help clobbered investors or the industry. Bumper stickers about Obamacare aren't an answer.

k1:
Trump has zero control over the capex spending of the upstream companies. Our oil and gas reserves are found and developed by private companies. Trump is no different than all of the previous presidents that have promised "energy independence", none of them have any control over our production. Your fears of an oil "glut" caused by Trump have no basis is reality.

Our upstream companies will increase spending on drilling and completions when it makes economic sense for them to do so.

I hope you're right, but it seems more complicated than that. Banks caught the excitement and poured capital into shale companies, inflating the bubble that eventually killed some companies, as we know. Right now Wall St is dumping money into the markets at the prospect of "infrastructure" spending. The post at the start of this thread seemed to be celebrating plans for pumping up energy production. I assume you posted it so we'd take it seriously:
<<Unleash America’s $50 trillion in untapped shale, oil, and natural gas reserves . . . Open onshore and offshore leasing on federal lands . . . and open shale energy deposits.>> This certainly sounds like somebody believes the new administration can goose up production and, through low prices, the economy.

From Mitch Zacks newsletter:

Bottom Line for Investors
Volatility in the aftermath of the election
– in a positive or negative direction,
because remember volatility works both
ways – should not surprise you. After all,
volatility is normal. So, I would caution
investors against reading too much into
what stocks do in the weeks or even
months following the election. It’s
better, in my view, to focus on the
fundamentals, and let the data do the
talking.
Of course, the election outcome matters,
because policy can shape how
corporations and individuals make
investment (and capex) decisions. But
passing sweeping legislation is difficult,
it takes time, the potential effects can
only be assessed once the bill becomes a
law. Until then, focus on what you know.