At his blog, Master Resource.Read More »
Prepping for Bankruptcy, PG&E Secures $5.5 Billion in “Debtor-in-Possession” Financing. What is “DIP” Financing?
How can a soon-to-be bankrupt company that will default on all its debts borrow so much? Here’s how. PG&E, the largest gas and electric utility in California, announced on January 14 that the holding company, PG&E Corporation, and its regulated utility subsidiary, Pacific Gas and Electric Company, would file for Chapter 11 bankruptcy “on or about January 29, 2019.” The announcement disclosed that PG&E was negotiating with four unnamed banks to line up $5.5 billion in...Read More »
Just what the crude oil market needs. By Nick Cunningham, Oilprice.com: The number of drilled but uncompleted wells (DUCs) in the U.S. shale patch has skyrocketed by roughly 60 percent over the past two years. That leaves a rather large backlog that could add a wave of new supply, even if the pace of drilling begins to slow. The backlog of DUCs has continued to swell, essentially uninterrupted, for more than two years. The total number of DUCs hit 8,723 in November 2018, up 287 from a...Read More »
==> My Part 2 of my critique of the “Green New Deal.” ==> My response to the 45 economists who wrote an open letter to the Wall Street Journal calling for a carbon tax. My favorite part: Before leaving this section, let me try one last attempt to get the reader to see the sleight-of-hand that these economists are pulling here. Suppose that President Trump had his protectionist economic adviser, Peter Navarro (who has a PhD in economics from Harvard, by...Read More »
Here’s a letter to the Wall Street Journal: Editor: The roster of economists who signed the letter calling for a steadily increasing revenue-neutral carbon tax is impressive (“Economists’ Statement on Carbon Dividends,” Jan. 17). Yet the case for a carbon tax warrants far more skepticism than their letter suggests. The chief reason for skepticism is, ironically, one that these economists themselves give for their support of a carbon tax – namely, market failure. It’s true that the...Read More »
Bankruptcy Next, PG&E Says. Shares Down 90% in 15 Months. From “Investment Grade” to “Default” in Three Weeks?
California’s rate payers & taxpayers likely on the hook, as we know from PG&E’s first bankruptcy in 2001. “PG&E remains committed to providing safe natural gas and electric service to customers as it prepares to initiate voluntary reorganization proceedings under Chapter 11 [of the bankruptcy code],” PG&E announced this morning. San Francisco-based, the regulated monopoly is one of the largest investor-owned utilities in the US and provides gas and electric services to...Read More »
AEI Peak what? BP just discovered a billion barrels of oil in the Gulf of Mexico BP’s investment in next-generation technology just paid off to the tune of a billion barrels of oil. BP made the massive 1 billion-barrel discovery at its Thunder Horse field off the tip of Louisiana. Executives are crediting their investment in advanced seismic technology and data processing for speeding up the company’s ability to confirm the discoveries at Atlantis and Thunder Horse. BP says it...Read More »
My intrepid Mercatus Center colleague Veronique de Rugy has a wish-list for 2019. A slice: Next on my wish list for 2019 is the termination of all crony programs that benefit well-connected and large companies at the expense of everyone else. They include the U.S. Export-Import Bank, everything in the Department of Commerce (apart from the Census Bureau and the Patent and Trademark Office — the two actually mentioned in the Constitution), many of the programs in the Department of Energy,...Read More »
“We’re not just talking about the theft of oil, but about a plan involving government insiders and a complex distribution system. It’s not easy to distribute and sell the pilfered contents of 600 pipelines each and every day.” By Don Quijones, Spain, UK, & Mexico, editor at WOLF STREET. Mexico’s new government has launched a multi-pronged offensive against the rampant oil theft that is costing state-owned oil company Petroleos Mexicanos (Pemex) billions of dollars a year and...Read More »
After the blood has been let, the feeding frenzy subsides, which is also brutal. The price of natural gas futures (January Nymex NGF19) gapped lower at the open this morning and plunged 7.8% as of this afternoon to $3.53 per million Btu. Everyone blamed the weather, specifically a new forecast this morning of warmer-than-normal temperatures across much of the US for December 22 through 26. But it’s not just this weather forecast. Over the last six trading days since December 10,...Read More »