THE AI REVOLUTION NEEDS ENERGY
US natural gas demand is growing to supply data centers and LNG exports. We believe midstream energy infrastructure offers predictable cash flows to investors.
Growth Is Gassy Not Oily
We’ve been critical of Magellan Midstream’s (MMP) proposed sale to Oneok (OKE) for months (see Oneok Does A Deal Nobody Needs), mostly because it forces MMP unitholders to pay taxes now that didn’t need paying and for some may never be paid. But we do agree with MMP CEO Aaron Milford that the growth opportunities […]
The Sunshine State Runs On Natural Gas
If you google “Florida solar” or “Florida natural gas”, both searches return around 150 million results. NextEra Energy, which owns Florida Power and Light (FPL), the utility that covers much of the state, is targeting zero emissions by 2045. Their 2022 ESG report says FPL expects to quadruple its solar generation capacity by 2031. They […]
Fewer MLPs And American Exceptionalism
The diminishing number of MLPs has started to draw attention from sell-side analysts. Morgan Stanley’s Robert Kad wrote in his Midstream Weekly that consolidation was likely to, “impact active manager mandates that have been dedicated to the sector.” The shrinking pool of MLPs and its impact on MLP-dedicated funds has been a developing problem for […]
An Uncontroversial MLP Merger
Energy Transfer’s (ET) acquisition of Crestwood (CEQP) highlights the shortcomings of the proposed merger of Oneok (OKE) with Magellan Midstream (MMP). Because ET and CEQP are both MLPs, combining the two entities doesn’t constitute a taxable event for unitholders. This contrasts with OKE/MMP where MMP unitholders will face the recapture of deferred income tax on […]
Governments And Their Energy Policies
Government regulations play a big role in energy markets. Although concern about climate change is part of the political discourse in every democracy, consumers and businesses aren’t going to reduce their emissions without tax credits, incentives and rules to modify behavior. Sometimes policies can have unintended consequences. Take ships, which mostly use heavy, bunker fuel […]