Once Again, Politics Collides with Energy Reality – and Everyone Suffers

by | published June 27th, 2017

With the almost daily battles raging inside the Beltway over claims of “fake news,” it’s hardly surprising that energy hasn’t been spared.

But what is surprising is the jarringly overt way in which energy is being politicized. The new Secretary of Energy, Rick Perry, is a good case in point.

As a former governor of Texas, Perry is a public supporter of increasing U.S. production of hydrocarbons like oil and gas, while openly criticizing the potential for alternative energy sources and roundly dismissing concerns over climate change.

And by the way, several times in the recent past he’s also come out in favor of shutting down the very Department of Energy that he’s now in charge of.

Recently, Perry’s gone on the offensive against renewables – as well as (whether he realizes it or not) natural gas. He claims they’re threatening the national power grid.

Here’s how some of the targeted companies responded

What the $2 Trillion Saudi IPO Means for You

by | published June 23rd, 2017

As the investment world prepares for what is becoming the most sought-after IPO in history, problems may be forming on the horizon.

The IPO is for a 5% position in the largest oil producer in the world – Saudi Aramco, Saudi Arabia’s national oil company.

When the dust clears from this one, a new sovereign wealth fund will be set up having as much as $2 trillion in purchasing power. Instantly, this will be the largest ever established.

This will usher in one of the most interesting diversification programs ever attempted.

While other “rentier” states – ones that depend on revenues from the extraction of raw materials – desperately attempt to diversify their internal economies by developing industrial production and service sectors, the Saudis are instead acquiring all manner of non-oil assets abroad.

Some of these may, of course, end up having subsidiaries or even headquarters in Saudi Arabia.

There are also signs that some of these investments will be to allow a major diversification of energy provision inside the country.

That will move the country from relying on oil to emphasizing solar, wave power, and even spinoffs from a number of desalinization plants. 

Nonetheless, a novel idea is emerging: for the first time a country will change the nature of its domestic economy by controlling a range of activities outside its own borders.

This makes virtually any publicly traded company anywhere in the world suddenly a potential target for Saudi investment money (and possible control).

Which makes the Aramco IPO uniquely important in the history of stock markets.

But as the world gears up for this hotly anticipated investment roadshow, three complications are setting in that may create some problems for Riyadh…

And opportunities for us…