Brian Crumley of Vortus Investments joined Weaver and East West Bank for December’s Energy Leadership Series Breakfast in Fort Worth to discuss the Great Debate: Oil & Gas vs. Renewables. Brian outlined the current state of the oil, natural gas and renewable industries and how President Elect Trump’s prospective policy changes could impact each of these industries.
Vortus Investments focuses on generating long-term capital gains through investments in the upstream energy industry. While renewables are not being considered for an investment focus their partnership needs to understand the potential supply and demand impact to oil and gas over the longer term. With a disciplined approach focused on partnering with owner/operators with identified assets, Vortus helps portfolio companies drive growth and operational improvements.
Brian’s discussion juxtaposed renewable power and oil and gas now and in the future. A few of his key points include:
- November 2016 was the first month in over 60 years for U.S. exports of natural gas to exceed imports
- 2016 will the first year that natural gas fired generation exceeds coal generation in the U.S. on an annual basis
- Natural gas is going to become a globally priced commodity instead of a regionally priced commodity and will benefit from market share gains
- Economically driven shift from coal to natural gas
- Shift from focus on peak oil supply to peak oil demand
- Differences between renewable fuel and renewable power
- In general, renewable fuels need approximately $80/bbl so recent downturn pushes that replacement risk further out especially without government subsidies
- Renewable power is approaching grid parity now on generation economics by taking shares from coal and nuclear
- Misunderstanding of electricity being an energy source instead of a fuel source
- 100,000 electric vehicles are estimated to displace approximately 5,000 barrels of oil per day
- 500,000 electric vehicles could only displace roughly 23 seconds of daily demand of oil
Weaver’s Energy Leadership Series focuses on providing industry insights, as well as addressing trends and challenges in an engaging, roundtable format. Contact us today to be added to our invitation list.