Hi Arjun--great history lesson on the evolution of the sector. Agree Rich Kinder is a genius. As businesses get closer to direct consumer markets, the regulator plays a bigger role. I think Order 636 in 1992 was a huge boon to the midstream sector. It unbundled the pipeline business and smart people found ways to capitalize on the arbitrage to create efficient markets that helped producer and consumer. The Chinese/Brazilians have been working on this for the last decade to liberalize their own markets to attract capital into that mid/last mile portion of the energy market. On new energies, people wish they acted like software/tech companies, but its still hardware at the end of the day and face the same capital intensive, scale and long lead time construction issues as traditional energies. The most successful, are still just power companies at the end of the day. Finally, as an investor, I am wondering--where is the puck going now for oil and gas? If you are an E&P company---should you pull out the Anadarko playbook assuming US shale is mature? Going into gas+ renewables feels just like a different type of utility play. Look foward to more thinking!
I like that thought at the end: "you're just trying to be right." It's amazing how many people in business you encounter who are actually playing other games, though they may not even know it themselves. Common games: 'looking good to others', 'defending an idea that's not working to save face because of a position one took earlier', 'getting by without working that hard because one gets paid anyway and one decided to cruise and not keep sweating to keep learning', 'personal undisclosed vested interest in an outcome' and the most dangerous game of all, 'intoxicated by ideology'.
We're very interested to hear your big picture analysis you mentioned at the end about the number of new companies and energy weighting in the S&P in ten years' time. If I understand correctly, over the next ten years you see a return to energy having higher weighting in the S&P due to the sector's profitability?
Thank you Investor. If we peaked at 44 energy companies in S&P 500 in 2013 and will soon be down to 20 (post HES, MRO), I would think energy should be able to get back above 30 within a decade. It can be a bit arbitrary. But we should get some new ideas and new companies if the cycle plays out as we think.
Hi Arjun--great history lesson on the evolution of the sector. Agree Rich Kinder is a genius. As businesses get closer to direct consumer markets, the regulator plays a bigger role. I think Order 636 in 1992 was a huge boon to the midstream sector. It unbundled the pipeline business and smart people found ways to capitalize on the arbitrage to create efficient markets that helped producer and consumer. The Chinese/Brazilians have been working on this for the last decade to liberalize their own markets to attract capital into that mid/last mile portion of the energy market. On new energies, people wish they acted like software/tech companies, but its still hardware at the end of the day and face the same capital intensive, scale and long lead time construction issues as traditional energies. The most successful, are still just power companies at the end of the day. Finally, as an investor, I am wondering--where is the puck going now for oil and gas? If you are an E&P company---should you pull out the Anadarko playbook assuming US shale is mature? Going into gas+ renewables feels just like a different type of utility play. Look foward to more thinking!
Deborah, thank you so much and appreciate all your comments! Arjun
Great trip down memory lane! Thanks
thank you Steve!
Outstanding as always. Thank you Arjun.
thank you Martin!
I like that thought at the end: "you're just trying to be right." It's amazing how many people in business you encounter who are actually playing other games, though they may not even know it themselves. Common games: 'looking good to others', 'defending an idea that's not working to save face because of a position one took earlier', 'getting by without working that hard because one gets paid anyway and one decided to cruise and not keep sweating to keep learning', 'personal undisclosed vested interest in an outcome' and the most dangerous game of all, 'intoxicated by ideology'.
We're very interested to hear your big picture analysis you mentioned at the end about the number of new companies and energy weighting in the S&P in ten years' time. If I understand correctly, over the next ten years you see a return to energy having higher weighting in the S&P due to the sector's profitability?
Thank you Investor. If we peaked at 44 energy companies in S&P 500 in 2013 and will soon be down to 20 (post HES, MRO), I would think energy should be able to get back above 30 within a decade. It can be a bit arbitrary. But we should get some new ideas and new companies if the cycle plays out as we think.