Entries by Simon Lack

Coal Trade Is Growing

SL Advisors Talks Markets
SL Advisors Talks Markets
Coal Trade Is Growing







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American coal exports are booming. Exports of thermal coal rose 26% last year, to 44 Million Metric Tonnes (MMTs). This is mostly burned to produce electricity. We also exported 46.5 MMTs of metallurgical coal, typically used in industrial processes such as steel manufacture. Shipments of thermal coal to India doubled, to 14.1 MMTs, close to […]

4Q Earnings Wrap

SL Advisors Talks Markets
SL Advisors Talks Markets
4Q Earnings Wrap







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Earnings for 4Q23 are almost complete. Most companies came in at or a few per cent ahead of market expectations. Cheniere (CEI) beat sell-side estimates by 11%, continuing a remarkable run. They are targeting a 1:1 ratio between buybacks and debt reductions and based on their long run desired share count should be retiring 12-13% […]

What Investors Ask Your Blogger

SL Advisors Talks Markets
SL Advisors Talks Markets
What Investors Ask Your Blogger







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Recently I’ve given presentations to a couple of investment clubs in Naples, FL. Usually I speak about midstream energy infrastructure, but I was also asked to expand on Our Darkening Fiscal Outlook, recently published on our blog, The Q&A is always enjoyable at such events. Below are some common themes that came up. Don’t weak […]

Our Darkening Fiscal Outlook

SL Advisors Talks Markets
SL Advisors Talks Markets
Our Darkening Fiscal Outlook







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There are two ways in which our looming fiscal catastrophe draws closer. One is through the passage of time, as entitlements grow with more aging Medicare recipients. The other is through worsening projections from the Congressional Budget Office (CBO). Both are happening. Start with interest expense. In the CBO’s May 2022 ten year Budget and […]

LNG Pause Will Boost Asian Coal Consumption

SL Advisors Talks Markets
SL Advisors Talks Markets
LNG Pause Will Boost Asian Coal Consumption







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Criticism of the White house pause on LNG approvals continues. Williams Companies’ CEO Alan Armstrong said it would cause some countries contemplating the construction of new LNG import facilities to hesitate. The clearest result will be increased coal consumption since it’s cheap and widely available across Asia. Shell expects LNG demand to increase by 50% […]

America’s Still Increasing The Right Energy

SL Advisors Talks Markets
SL Advisors Talks Markets
America’s Still Increasing The Right Energy







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The US Energy Information Administration (EIA) released its Short Term Energy Outlook (STEO) last week. It confirmed the current trends of increased production, improving mix and declining CO2 emissions. Most notable is that coal production is continuing to fall. This year should see output 20% below 2022, at 470 Million Short Tons (MSTs). We use […]

Struggling To Justify The Pause

SL Advisors Talks Markets
SL Advisors Talks Markets
Struggling To Justify The Pause







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We’ve received a lot of questions recently about the White House pause on approving new Liquefied Natural Gas (LNG) export terminals. Several projects are already under way, and the pause does not rescind approvals that have already been issued. So for example construction of NextDecade’s Rio Grande terminal is continuing, with permits already in hand. […]

Is Energy Becoming Less Cyclical?

SL Advisors Talks Markets
SL Advisors Talks Markets
Is Energy Becoming Less Cyclical?







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It’s a question posed at every mid-cycle. Observers of commodity markets will often advise that the cure for low prices is low prices. Meagre profits reduce production, eventually curbing supply and driving prices higher. 2014 was the last cycle peak for energy. The shale revolution brought new US supplies of oil and gas onto the […]

Why Is Oil Still Cheap?

SL Advisors Talks Markets
SL Advisors Talks Markets
Why Is Oil Still Cheap?







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Investors often ask us why crude oil prices aren’t higher. The industry has maintained capex on new production too low to sustain current production for years, without any apparent impact on prices. More recently, the Middle East has generated a plethora of  incidents which might be expected to cause consternation about the reliability of supplies […]

White House Adopts An Energy Policy Where Everyone Loses

SL Advisors Talks Markets
SL Advisors Talks Markets
White House Adopts An Energy Policy Where Everyone Loses







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With his moratorium on new LNG export terminals, aging President Joe Biden and his advisers have stumbled on a way to upset both ends of the political spectrum. Domestic energy businesses want to export more, cheap US natural gas to foreign buyers. Following Russia’s invasion of Ukraine two years ago the US pledged to replace […]

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