Last week’s fears of global recession herald the late stages of Trump’s trade war. It’s already possible to see the outlines of a triumphant victory speech. The U.S. trade deficit with China is on track to fall for the first time in at least 30 years. After it reached a new record last year, critics were quick to point out the Administration’s failure to resolve an issue that figured prominently in the 2016 campaign. But as the chart shows, unless trade flows for the second half of 2019 follow a dramatically different pattern than in the past, this year will provide the White House with plenty of ammunition heading into the 2020 election.

The U.S. always had a stronger hand; America’s vast domestic market means trade penetration is the joint-lowest among the world’s ten biggest economies (tied with Brazil). America has hundreds of world class companies selling goods and services globally. But many thousands more achieve years of growth without having to venture abroad. Compare that with Germany’s vaunted “mittelstand”, of small and mid-size industrial companies that export successfully around the world. Overseas customers are vital to German GDP growth, which is why ongoing trade friction tipped the German economy into contraction during the second quarter.

Soybean exports to China represent 10% of all U.S. farm output, so there are regions and industries that have suffered. Consequently, the Administration recently announced $16BN in aid to farmers hurt by Chinese reciprocal tariffs. But the overall result is that U.S. GDP has been less harmed than in other countries. High-tech goods such as aircraft and integrated circuits are among the biggest export categories to China, but since intellectual property is one source of conflict, these industries shouldn’t be surprised if they get caught in the crossfire.

Trump draws widespread condemnation for the manner in which he governs, but in taking on the trade deficit with China he is reflecting the views of many Americans. Since World War II, the U.S. navy has protected vital shipping lanes around the world, facilitating trade and thus promoting global prosperity. Questioning this policy doesn’t resonate with most politicians; but the emergence of other big economies, such as China, to compete with the U.S.suggests that American security policy can be less selfless than in the past.

A more transactional U.S. approach, less drawn to underwriting the greater good prompts simple questions: one is, why does the U.S. maintain troops in Germany as protection from Russia, while Germany increases its imports of Russian natural gas? America has bankrolled military support for many countries rebuilding their economies since World War II. Times are changing.

Bilateral trade deals suit the U.S. Although the White House was widely criticized for withdrawing from the Trans Pacific Partnership (TPP), negotiating within large groups blunts the leverage of the world’s biggest economy. The U.S. benefits from a series of bilateral agreements creating a hub and spoke framework, although most nations do better by coordinating with others.

Last year’s free trade deal with South Korea is an example. More recently, NAFTA was replaced with the US-Mexico-Canada Agreement (USMCA) in a pair of bilateral negotiations with Canada and Mexico that tweaked the old deal to suit the U.S.

It’s why the EU is more popular with smaller countries. Once Britain leaves the EU and opens bilateral trade negotiations with the U.S., it’ll experience the reduced leverage that comes from being outside the group.

The shrinking deficit with China is creating an opening for Trump to reach an agreement, removing the growing headwind slowing global GDP. He can boast of being the first president to interrupt the steadily increasing trade deficit with China. If he doesn’t dwell for too long, he may even head off the recession that investors increasingly fear.

What’s unclear is whether it’s been worth the fight. The U.S. Federal budget deficit relies on financing by foreign investors. Because America doesn’t save enough to meet its borrowing needs domestically, the surplus dollars held by trade partners, including China, get reinvested into U.S. financial assets, such as treasury bonds. A lower trade deficit suggests fewer excess dollars owned by foreigners to be invested. This in turn means more U.S. debt will need to be financed by domestic savers, which will require higher interest rates as an inducement. And even though the U.S. has a strong hand in trade negotiations, slowing GDP growth doesn’t help anyone.

Provoking trade friction may not always be smart policy, but it does reflect popular opinion. It is democratic. Trump’s critics are many, but he is a reflection of American views on trade.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

Yesterday’s White House announcement that newly imposed tariffs on Chinese goods would be delayed three months sent stocks higher. The trade dispute hasn’t hurt the U.S. that much, although there’s widespread evidence of financial distress among farmers. Agriculture Secretary Sonny Perdue showed his sledgehammer wit in a joke aimed at farmers complaining about tariffs. China recently stopped buying U.S. agricultural products entirely in response to the latest U.S. tariffs. Farmers vote, and the White House has modestly recalibrated its approach. Trump clearly enjoys the relatively unfettered freedom of action afforded the president on trade.

Trade friction threatens global growth. The IMF recently called for a quick resolution between the U.S. and China. It’s blamed for the continuing drop in bond yields, with some investors openly contemplating whether the U.S. could soon join other developed country sovereign debt with negative interest rates. U.S. ten year yields of 1.7% are the highest in the G7, and among those who shop for value in government bond markets they probably look enticing.

America’s higher yields reflect our relative immunity to trade war fallout. The S&P500 recently broached 3,000 for the first time before retreating on new tariffs. But yesterday’s bounce took it back to within 3% of recent al-time highs. We noted last week how the Equity Risk Premium provided a compelling case for investors to allocate towards risk assets (see Stocks Offer Bond Investors an Opening).

Although Trump’s protracted dispute with China has broad domestic support, we continue to believe that a resolution will be found within the next few months, so as to avoid any economic fallout in an election year. Expect to see agricultural exports and natural gas heralded as big winners.

The U.S. energy sector could certainly use a confidence boost. Pipeline earnings have generally been at or ahead of expectations. The bull story relies on the growth in free cash flow (see The Coming Pipeline Cash Gusher). 2Q19 earnings reports provided further confirmation that growth projects peaked last year, leaving more cash available for dividend hikes.

Traders betting on a global slowdown are quick to short crude oil, and recent weakness in energy prices has hurt the sector’s stocks too. No matter that pipeline company earnings are generally not sensitive to commodity prices. The most asked question by clients recently centers around the incongruity of good operating performance with falling stock prices. The short answer is that several years of dividend cuts left income-seeking investors betrayed. So far this year, this traditional buyer hasn’t rushed back, as shown by flows into retail-oriented funds.

Improving fundamentals and compelling valuations are attracting private equity buyers. Public market buyers will surely follow.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

Infrastructure projects can require a lot of planning, but the proposed link by the Alaska – Alberta Railway Development Corporation (A2A Rail) traces its roots back to 1898, when a charter to build a line to Alaska was awarded to the Edmonton & District Railway Company. Canada is perennially challenged to move its bitumen-based crude oil to export markets. Progress on the Keystone XL suffered years of delays. It’s designed to move crude from Alberta to Cushing, OK. Environmental activist opposition under Obama at one point caused TC Pipelines (TRP, then called Transcanada) to take a C$2.9BN writedown in 2016.

The obvious move was Trans Mountain (TMX), an expansion pipeline within Canada to the Pacific coast for export. But this caused such acrimony between Alberta and neighboring province British Columbia that Kinder Morgan Canada eventually gave up, selling the project with fortuitous timing to the Canadian federal government.

Enbridge (ENB) recently told us they wouldn’t attempt to build a new oil pipeline in Canada, unless it was wholly within energy-friendly Alberta.

Against this backdrop, there’s a resurgence of interest in moving crude by rail to export facilities in Alaska. It’s a measure of the unintended consequences of environmental extremists that a higher-cost, riskier route is being pursued. Alberta’s oil production exceeded the takeaway infrastructure so significantly that the provincial government imposed production constraints. Last year the benchmark Western Canada Select (WCS) traded as much as $30 per barrel below the WTI benchmark, ruinous testimony to Canada’s domestic transport constraints. Getting its oil to markets has created fissures within Canada. Albertans feel their net contributions to the Federal budget are unappreciated by the rest of the country.

Few Canadians will soon forget the 2013 crude train disaster in Lac-Magentic, when a fireball engulfed a small town in Quebec, killing 47 people. Pipelines’ better safety record is ignored by opponents of today’s energy, hence reconsideration of the railroad.

The Alberta – Alaska Railway (A2A) will run from Edmonton and Fort McMurray, in the heart of Alberta’s tar sands region, carrying 1-1.5 million barrels a day of crude to the ports of Alaska’s south central coast. It’ll link up with the Trans Alaska Pipeline System, which accesses Alaska’s North Slope oil reserves. Proximity to Asian markets shaves four days off the shipping time compared with ports in the Gulf of Mexico, home to North America’s crude export terminals.

A2A will pass through Canada’s Yukon territory, a remote and resource-rich area. Supporters note that extracting Yukon’s valuable minerals will become more commercially attractive with access to railroad transport. Flexibility is rail’s main advantage over the pipelines, which offer safe, specialized transport just for liquids and gas. Copper, lead, zinc and uranium could be mined and linked by an extension to the A2A, boosting local employment in a sparsely populated and relatively poor region. By promoting benefits beyond global access for Alberta’s crude, the project is aiming for broad support.

A2A may even provide alternative rail shipment for Asian goods coming into the U.S.

The cost is estimated at C$14-20BN, and should find eager investors among the many private equity funds dedicated to infrastructure. Robert Dove, Head of Financing and Strategy for A2A Rail, said, “We anticipate institutional investors will find the long term cash generating ability of the railway to be highly attractive. By providing improved access to export markets for Canadian crude oil as well as developing important mineral reserves in the Yukon Territory, we think there are multiple revenue opportunities for this important infrastructure project.”

In June, A2A Rail reached agreement with the Alaska Railroad Corporation on working together to build the connection. Stakeholder consultations come next, including negotiations with the many indigenous tribes known collectively as First Nations. In many cases opposition can probably be softened with community investments. 121 years after first being contemplated, a railroad from Alberta to Alaska took another step towards reality.

Although there seem to be countless stories about the demise of fossil fuels because of climate change, projects such as A2A reinforce that oil, gas and natural gas liquids will continue to provide the vast majority of the world’s energy for decades to come.

We are invested in ENB and TRP.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

The Federal Open Market Committee probably feels pretty good about last week’s decision to cut rates. We noted the multiple macro issues confronting decision makers (see Fed Ponders Multiple Uncertainties). With Chinese trade negotiations moving away from a deal, diversification isn’t helping as all risk assets are lower.

Government bonds provide a useful counterweight at such times – U.S. ten year yields briefly dipped below 1.7%. Knowing when to sell is key to extracting value from the flight to safety.

We regularly note the Equity Risk Premium (ERP), the difference between the earnings yields on the S&P500 and ten year treasury yields. It’s been showing stocks are cheap – on days like Monday, when global stocks were routed on trade war fears, it’s easy to overlook the ERP.

Interest rates remain ruinously low. Last month, in Real Returns on Bonds Are Gone, we showed that profit growth would provide an even more powerful ERP-case for stocks.

Current fears are for a growth slowdown, although bottom-up earnings forecasts on Factset continue to project 11% higher earnings next year. The chart below reflects the impact of a 20% drop in earnings – a substantial decline. Even an outcome as dire as this would leave stocks substantially cheaper than ten years ago. During the financial crisis, earnings fell by 29% over three years, from 2006-09.

Getting the ERP back to its 50+ year average of 0.6 would require a 60% drop in earnings.

Over $12TN of sovereign debt has negative yields (see Still Fearing Another Financial Crisis). The continued inflexible allocation to fixed income of vast pools of capital reflects widespread fear of another financial crisis. In effect, a 60% drop in stocks with its consequent mean reversion of the ERP is regarded as plausible by a great many large institutional investors.

Over the near term the ERP has little to say on valuations. Trading dominates as much as ever. But over any realistic investment horizon – say a year or more – the math is striking. P/E ratios are historically high, as adherents of Cyclically Adjusted Price Earnings (CAPE) maintain. But bond yields are historically low, and there’s little point in considering either in isolation.

The pricing of financial assets reflects a healthy degree of caution, something easily overlooked when a downturn in trade negotiations hurts risk assets. Trillions of dollars is avoiding stocks in favor of the tyranny of low and negative interest rates. U.S. state and local defined benefit public pension funds hold $4.4TN in assets, $4.2TN less than projections show they need. This 48% funding shortfall isn’t going to be solved by bonds.

We think equities provide a substantial margin of safety compared with bonds for long term investors.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

Energy remains probably the least loved of the S&P500’s 11 sectors. Over-investing in new projects has turned off many investors, who would like to see more cash returned via buybacks and dividends. And the Democratic primary debates remind that an anti-fossil fuel stance is needed to excite the party’s hard core, introducing some electoral uncertainty to the outlook.

The good news is that cash flows are growing, as pipeline companies are responding positively to investor feedback (see The Coming Pipeline Cash Gusher). And the aspirational goals of some Democrats to phase out oil and gas will collide with technical realities and popular reluctance to return to 18^th century living standards.

Earnings season is generally confirming the positive free cash flow story we’ve articulated for midstream energy infrastructure (see The Coming Pipeline Cash Gusher). Enterprise Products Partners (EPD) continues to execute well, beating EBITDA expectations by around 10% with 18% year-on-year growth. Williams Companies (WMB) modestly exceeded expectations and provided good guidance, boosting the stock. This highlights that weak natural gas prices, which had kept the stock under pressure for a couple of weeks, have little impact on operating performance.

TC Energy (TRP, formerly known as Transcanada) reported another solid quarter. And Oneok (OKE) reported Distributable Cash Flow (DCF, the cash generated from existing assets after maintenance expense), of $541MM, $100MM ahead of expectations. Only Western Gas (WES) bucked the trend, with poorly-timed lower guidance just when Occidental (OXY) is considering selling their position following the acquisition of Anadarko (ADC).

Midstream energy infrastructure has undergone a transformation in recent years. Predictable and rising distributions were abandoned when the Shale Revolution required new pipelines. Income seeking investors felt betrayed, and many big MLPs converted to corporations so as to access a far broader set of investors (see It’s the Distributions, Stupid). Today, MLP-dedicated investors are missing two thirds of the sector including most of the big companies.

The ten biggest companies comprise the bulk of the industry. Dividends average 6.4%, comfortably covered by 10.8% DCF, which is growing at 9%. Leverage is down, at 4.1X Debt:EBITDA, and all are investment grade. Yields on their bonds are typically less than half their dividend yields, revealing that banks and rating agencies, with their access to proprietary information are far more optimistic than equity investors.

The positives include:

• Capex on new projects, which continues to fall from last year’s peak
• Improved governance for those MLPs that have converted to a corporate structure. This makes them more attractive to institutional buyers.
• Stronger balance sheets, especially compared to more levered sectors such as REITs and utilities where over 5X Debt:EBITDA is common
• Low borrowing costs
• Interest from private equity, whose managers see better value in public markets. IFM’s acquisition of Buckeye Partners for a 27.5% premium earlier this year was an example
• Free Cash Flow growth which is on course to leap from $1BN last year to $45BN by 2021, based on our analysis of the companies in the broadly-based American Energy Independence Index.

2Q19 earnings reports are so far confirming all the positives noted above. Midstream is out of favor, cheap and poised to rise.

We are invested in EPD, OKE, TRP, and WMB

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund. To learn more about the Fund, please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

If not today, then within a few weeks the Federal Reserve is likely to acquiesce to President Trump’s call for lower rates. Ten year U.S. treasury yields are low by most measures at 2.05%, but they’re the highest in the G7, and even higher than Greece’s. The President has criticized Fed policy as creating unnecessary headwinds to the economic boom his policies have created.

Trump is obviously talking his book. With the unemployment rate below 4% for a year and hourly earnings growing at 3.1%, the economy is not obviously in need of stimulus. Inflation continues to remain below the Fed’s 2% target. The Phillips Curve, which posits that you can have low unemployment, or low inflation, but not both, long ago ceased to explain the world.

There are an unusual number of macro uncertainties that the Fed must consider.

The ongoing trade dispute with China is hindering growth, and not just in China. Germany recently halved its forecast 2019 GDP growth forecast, to 0.5%. We think it’s likely the U.S. will close a deal with China in time for the economy to show a benefit heading into next year’s Presidential election.

Tensions with Iran seem to have eased recently, and crude oil has slipped by $5 as the possibility of a closing of the Straits of Hormuz has receded. Iran is likely to avoid direct confrontation with the U.S., and election calculations similarly suggest that Trump will avoid anything that could become a lengthy military engagement. The possibility of accidental confrontation remains, but this issue is for now lurking in the background.

Brexit continues to be an absorbing spectacle of self-destruction by a country enduring serial poor leadership. Although Conservative PM Boris Johnson claims that the UK is leaving the EU on October 31 with or without a deal, this seems unlikely. Parliament has voted against a hard Brexit, and as many as 30 Conservative party MPs, including former Chancellor of the Exchequer Philip Hammond, have vowed to ensure the country doesn’t leave the EU without a deal. Moreover, the PM doesn’t have a mandate for a hard Brexit, since the referendum offered a simple choice and none of the senior Brexit campaigners advocated it.

PM Johnson endured booing crowds on a recent visit to Scotland, where voters chose Remain three years ago. A rocky visit to Northern Ireland looms, whose population is also facing the prospect of being dragged unwillingly out of the EU by the English majority. Brexit is now the defining political issue in Britain. Ask where someone lives (i.e. urban vs rural) for a good guess at where they stand.

Assessing the precise economic impact of a hard Brexit is tricky. There’s plenty of historical data on countries joining trading blocs; far less of countries leaving, because as The Economist dryly notes, “…this rarely happens.” But the downside risk to the UK is substantial, and the impact might ripple across the world. Fed chair Jay Powell has cited Brexit as another potential threat to economic growth.

It’s quite possible that the October 31 deadline could pass with the UK still in the EU. Parliament is likely to prevent a hard Brexit, and the EU won’t simply eject the UK, much as many may wish to. A general election might resolve the issue, and if parties opposed to a hard Brexit (Labor and Lib-Dem) are victorious, a second referendum could reverse the first. Britain isn’t yet out of the EU, and there are several more scenes to play out.

Finally, one more risk that’s coming over the horizon is the 2020 election. It looks like Trump’s to lose, but with over fifteen months to go a lot can happen. At some point, it’s likely Trump’s re-election will look in doubt – either because the Democrats abandon their idealism and pragmatically opt for an electable candidate, or because a new presidential scandal erupts that sticks. Stocks are likely to react poorly, and a nasty presidential election that reflects badly on all concerned is probably in store.

With all these risks to consider, who can blame the Fed for taking out a little bit of insurance by lowering rates.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund. To learn more about the Fund, please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

Britain’s new prime minister, Boris Johnson, sports a mop of blond hair, shuns conventionality and routinely spins facts to suit his purpose. The photo is from a 2006 charity soccer game in London against Germany, when he head-speared an opponent in a maneuver better suited to wrestling. It’s an appropriate metaphor for the upcoming Brexit negotiations with the EU.

Even to a Brit, the unfolding constitutional drama has been hard to comprehend. Boris was chosen by 96,000 hard-core Conservative party members, and will be PM because they (barely) have a Parliamentary majority. The country voted for Brexit (by 52%-48%), and yet Parliament has rejected both a negotiated EU exit and a hard Brexit. It’s possible the next deadline of October 31 may pass with the UK still a reluctant EU member.

Poor leadership is all Britain has. If Theresa May wasn’t all but gone, she would have faced more withering criticism over the entanglement with Iran. Having seized an Iranian tanker, the careless loss of a British-flagged ship might charitably be ascribed to domestic leadership distractions. The inability of the Royal Navy to offer protection, along with Britain’s intimidating vow to resolve using all diplomatic means, reveals a country wrestling with diminished status and no plausible military option.

PM Johnson enters office with an unwanted foreign policy crisis. But as a vocal cheerleader for Brexit, it is appropriate that he should be the one leading the country as it plows ahead into unknown status.

Meanwhile, the main protagonists are both avoiding direct conflict — Iran because military defeat would be swift, and Trump because it would jeopardize his re-election. So the situation percolates without boiling over, with little end in sight.

Crude traders have remained sanguine over the potential for supply disruption through the Straits of Hormuz. A defining feature of the Shale Revolution is that it has ameliorated the price spikes that used to threaten global growth. Higher prices increase profitably accessible reserves, and shale’s short production cycle always promises more availability within a matter of months, if needed.

Britain’s economy is slowing due to Brexit uncertainty. Shaky consumer confidence doesn’t need a debilitating spike in crude. Fortunately, such moves are becoming rarer. Volatility in crude oil isn’t much different than a decade ago, because prices still fall quickly. But world growth is more susceptible to sharp increases. Encouragingly, price spikes are becoming less frequent and milder, another tangible demonstration of the Shale Revolution’s impact in addition to generally lower prices.

President Trump could justifiably note how American energy independence is protecting oil importing nations like Britain from price shocks. PM Johnson needs a narrowing Atlantic to offset the politically widening English Channel.

U.S. LNG exports, another Shale Revolution benefit, are likely to be on the table as Brexit Britain seeks deeper ties with the U.S., allowing Trump to show he can close a trade deal. A Donald-Boris honeymoon beckons.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).

Climate change is driving tremendous upheaval in the energy sector. One consequence is that making long term investments is exceptionally difficult. A large, conventional oil or gas project is exposed to uncertainties around GDP growth, production costs and commodity prices over a payback period that can extend 10 to 20 years or more. Public policy changes add further uncertainty, which is why big projects are shrinking, and investments with a faster payback are gaining favor. The short-cycle projects offered by U.S. shale are one answer to energy production at a time of uncertainty.

There are at least seven entities publishing projections on long term global energy use, and because of multiple scenarios they produce 13 forecasts. Resources for the Future, a non-profit research institution, has helpfully combined these in Global Energy Outlook 2019: The Next Generation of Energy (“GEO”) so as to allow easy comparison. These fall into three categories of energy consumption to 2040 based on different public policy regimes: (1) unchanged policies, (2) likely new policies, and (3) policies designed to lower CO2 emissions.

Surprisingly given the diverse set of forecasts and long horizon, there is reasonable consensus in some key areas. Energy consumption will continue to grow, driven by rising living standards in developing countries and increased population. Lowering CO2 emissions pits wealthy countries (“West” in GEO terminology, meaning Europe, Eurasia, North America, South and Central America) willing and able to constrain energy use against the aspiration to western living standards in non-Japan Asia (“East” in GEO which is Asia-Pacific but includes Africa and the Middle East). An estimated 1.1 billion people don’t have access to electricity today.

Consumption of oil and related liquids reflects greater auto ownership, aviation and plastics use in the East, more than offsetting improved efficiencies which will curb demand in the West. But the bigger challenge remains global coal consumption, where East and West are moving in opposite directions. China alone burns 6X as much coal as the U.S.  In fact, China consumed more coal last year than the rest of the world combined.  Any path to reduced climate change with today’s technologies includes sharply reduced coal consumption.

Substitution of natural gas for coal underpins our constructive outlook for U.S. exports of Liquified Natural Gas (LNG). Even on current policies most GEO forecasts see steady growth in natural gas. If the countries of the East decide to use less coal than most forecasts expect,LNG should see additional demand growth.

By contrast with natural gas, views on renewables vary widely. The International Energy Agency’s “Sustainable Development Scenario”, which incorporates policies to lower CO2 emissions, sees 4X as much renewable power generation as the U.S. Energy Administration’s “Reference Case”.

Electric vehicles (EVs) are marketed as a reduced CO2 solution, although when you properly account for emissions in their manufacture and battery disposal, the benefits are murky. It also depends on how the electricity used is generated. Wyoming relies exclusively on coal, making a Tesla purchase in the Cowboy State an environmentally unfriendly choice. Estimates of global EV penetration in two decades vary widely.

Most of the promise of renewables lies in their generation of clean power, and electrification of the world’s energy consumption is part of any attempt to tackle climate change. But the production of steel, cement, fertilizer and plastics rely on the high heat generation and other chemical properties of fossil fuels. Aviation is unlikely to use batteries in the foreseeable future. The result is that renewables penetration of total primary energy is expected by most forecasts to increase modestly,  to around 20%.

The conflict between energy use and emissions is shown in the three forecasts that incorporate reduced CO2. Two of them assume falling energy consumption, which seems politically implausible for countries of the East barring transformational improvements in the technology around energy use and storage.

Every energy investor needs to stay current on trends and developments in energy use. The GEO report is a useful reference guide.

SL Advisors is the sub-advisor to the Catalyst MLP & Infrastructure Fund.  To learn more about the Fund,  please click here.

SL Advisors is also the advisor to an ETF (USAIETF.com).