Reuters – Biden pauses LNG export approvals after pressure from climate activists
Bloomberg – Biden Freezes Licenses to Export Gas, Imperiling Projects
Yahoo Finance – President Biden suspends liquified natural gas exports
If one only scans the headlines, the world as we know it is crashing down, either way you look at the issue. The unfortunate reality is that every issue in an election year is now framed with a political bent. As usual, the answer lies neither to the left or right but squarely down the middle.
Fact: the Biden administration did enact a pause in the permitting process for future or in-process LNG export applications. The impact on existing permits is zero. The stated rationale is reasonable, “The current economic and environmental analyses DOE uses to underpin its LNG export authorizations are roughly five years old and no longer adequately account (all) considerations …”
Apparently, the president carries the authority as a similar review was performed under the prior administration. The current DOE is perhaps being prudent (being generous here) as LNG exports have increased 61% since Biden took office. The issue here is the administration’s announcement being timed as and electioneering tool and the tenor being akin to poking the opposition with a stick (read the White House release). But Biden does currently control the bully-pulpit.
A maximum 27 projects could be impacted, although some are on hold already for various non-Federal DOE reasons. One example being the state of Louisiana requiring a redesign of the MPEH project to a closed-loop system. The actual number probably resides between the 12 touted by the Sierra Club and the four reported by Reuters. The four appear to be Sempra’s (SRE), Commonwealth LNG’s (pvt), Energy Transfer’s (ET) and Venture Global’s (pvt). Fortunately, it appears none of my investments in this space carry any short-term risk.
Besides, look at the fine print of the order. Allies and Free-trade partners appear to be excluded, which means 86.1% of existing exports are not at risk and could in fact be increased as necessary. Therefore, much ado about nothing and I see no investible angle.
With all the attention bestowed on Taylor Swift recently, I’m referring to the relationship with the Kansas City Chiefs not the deep fake (which Microsoft (MSFT) is investigating). With all her travels to town, I just had to wonder if any local journalist had taken the initiative to determine her impact on the local economy.
One had, but not to the depth I prefer. Taylor’s direct impact appears to be (besides charity), with local niche boutiques and restaurants (ignoring the private plane (which if refueled would be Phillips 66 (PSX)). The shops listed are private enterprises and we don’t know who their suppliers are. Outside of possible unknown shippers, no investment opportunities are available. That leaves us with the only investible opportunity, the banks used for tax receipts. Last year, I researched the bank used by Kansas City which was Commerce Bank (CBSH). Therefore, I selected a Kansas City suburb, Independence, for this analysis. Per open-source records, Independence paid fees for services to roughly 1500 businesses. Isolating the banks, the one with the highest revenue is UMB Financial (UMBF) which one could assume result from treasury operations including tax and bond management. CBSH comes in a distant sixth, behind USB, BOKF, RF, and CASS.
Just one of those random datapoints that are probably meaningless, but good luck to the Chiefs in the Super Bowl!
On the Bitcoin ETF front, the pricing appears to be stabilizing with BTC down 9.48% since inception and the ETFs (excluding GBTC and DEFI) down an average 10.0%. My guess is the difference is largely due to the ETF fees. Since the day 1 euphoria, the ETF prices have largely tracked the price of BTC. Perhaps we are at the point where a buy the dip mentality is warranted?
Next week – monthly review (already).
Seeking Returns 