Oliver Stone’s plan to revive nuclear power

Hello and welcome back to Energy Source.

Don’t miss our piece from budding London dispute between the oil kingpin who heads this year’s UN climate conference and environment ministers.

Oil prices have fallen sharply this week as fears about the economic outlook grow. Derek has more below.

Myles talks to Oliver Stone, the iconic and controversial director, about his new film about nuclear energy. And we chatted to Ben Dell and Mark Viviano of influential investment firm Kimmeridge to ask where they are placing their bets and the future of shale.

Thanks for reading. — Justin

Oliver Stone: “It’s time to look at nuclear power again”

The conspiracy behind the Kennedy assassination. The Vietnam War. Jim Morrison. The virtue of greed. What a good guy Vladimir Putin is.

Director Oliver Stone has an eclectic list of interests and opinions. The last one is nuclear power.

Stone’s latest documentary Nuclear now it is a hymn to atomic energy, which he believes is the only viable solution to tackle emissions and curb climate change.

“We don’t have time to be afraid anymore,” Stone declares at the beginning of the film. “It’s time to look again at a proven form of energy. It’s time to look at nuclear power again. Because this incredible power – the very thing we fear – is what could save us.”

Stone’s basic premise is that nuclear power has historically received negative criticism, falling victim to “misinformation” and unfair associations with corporate America, nuclear war, and the prospect of meltdowns.

“I was never an activist on the nuclear energy issue in the 70s,” the director told ES in an interview. “When I saw the Al Gore movie… [An] Inconvenient truth – it really disturbed me and got my attention to what we are going to do. And since then I’ve been very confused by all the solutions and all the dialogues. . . I have no scientific background. But I just responded by saying, ‘well, let’s make a movie.'”

The film, directed and narrated by Stone, sets out – for the most part in a coherent and rational way – to dismantle many of the myths about nuclear power, particularly about safety.

It does a good job of dispelling some of the common misconceptions about accidents from the 1979 partial meltdown on Pennsylvania’s Three Mile Island to the 2011 Fukushima disaster. Neither, he notes, caused immediate fatalities. “I didn’t know this, any of this stuff,” Stone said.

He argues that even deaths from Chernobyl – 31 directly and up to 4,000 indirectly – pale in comparison to other major industrial accidents and are “at best a very small fraction of deaths from fossil fuels”. This is a fair statement, even though studies have suggested that the total number of people indirectly affected could be much higher.

These incidents, coupled with the Hollywood scare, Stone says, have done massive damage to nuclear power’s image.

“I would say psychological fear is the most important factor. . . Uncertainty leads to fear. And people haven’t really been aware of science and haven’t really educated themselves,” she said.

“That was a big deal, because we became biased and evolved into ideological issues, because of Hiroshima and Nagasaki, 1950s horror movies and then 1970s misfortunes — [The] China Syndrome, Silk wood and probably worst of all, was the Chernobyl series on HBO in the 2000s that reaffirmed this.

Nuclear’s significant failures, however, barely get a mention. The Vogtle plant in Georgia, which is on the verge of commissioning America’s first new reactor since 2016, is not there at all, perhaps due to its skyrocketing price tag of more than $30 billion. Though Stone insists, his problems have more to do with modern America’s ineffectiveness when it comes to big infrastructure projects than anything else.

The film is sure to spark a debate about the role of nuclear energy as the world seeks to electrify its energy systems.

But his biggest stumbling block may be Stone himself. The director made headlines by expressing his support for Vladimir Putin since Russia’s full-scale invasion of Ukraine. This week he told The Guardian that Putin was a “great leader for his country”.

As one nuclear advocate told me: “I’m glad the argument was presented in an accessible way. I’m not sure I’m happy that it was made by Oliver Stone. (Myles McCormick)

Kimmeridge weighs in on Shale’s future

We recently had the opportunity to sit down with influential activist energy investors Ben Dell and Mark Viviano, CEOs of investment firm Kimmeridge, to talk about the oil and gas investment landscape. Here are some points of the conversation:

1. Gas is the future of shale again

The American shale revolution took off in the country’s large natural gas fields, such as Marcellus in the Northeast, in the early 2010s. Investments subsequently migrated to large oil fields in North Dakota and throughout Texas once that horizontal drilling and fracking have proven to be a viable way to pump crude oil.

But the balance could return to natural gas for two crucial reasons, Viviano argues. First, the boom in liquefied natural gas exports has increased access to lucrative international markets.

“Eventually we see a repricing of US natural gas as it gets better connectivity to global markets,” he said.

Second, Viviano argues, natural gas producers are likely to be viewed more favorably by investors because the fuel is seen as cleaner than oil, and unlike crude, most still see the possibility that demand global continue to grow. This will especially happen if gas pushes coal out of the electricity mix in Asia the same way it does in the United States.

Gas companies could get a “different valuation multiple” than oil companies due to better demand growth and “different environmental perceptions,” he said.

Dell calls it “one of the largest energy mismatches” and says gas demand will grow for at least the next 25 years.

“There is absolutely no way we can meet any carbon target without natural gas taking market share, without natural gas potentially doubling the volume on a global basis. And it’s being rated as dating,” he said.

2. Corporations hold back business

For years, investors in the US shale have been beating the drum for more deals to consolidate a highly fragmented corporate landscape. But those agreements have been slow in coming.

One of the main reasons, says Viviano, is that many executives and directors don’t want to sell; even if the deal would be good for shareholders.

“I think it’s management incentives. And, more and more often, we hear that his board is unwilling to give up an increasingly scarce position,” she said.

The number of businesses in the shale area is decreasing, not growing, so if you sell, there’s no guarantee another job will come along.

“Ultimately, the board is supposed to represent the shareholder, the owners of the business, but they’re not aligned,” Viviano said.

He says companies should disclose when they hold talks about a potential deal so investors can chime in, which he says could spur much-needed mergers.

3. The shale sector has already drilled its best wells

One of the hottest debates in the shale industry is whether – and how quickly – the industry is running out of its best drilling prospects.

Dell argues that we are definitely “seeing degradation” and claims it is happening in the US.

He also says people shouldn’t be surprised because companies have been told by investors not to spend to find new areas that could fill the pipeline of drilling stocks.

“We didn’t want anyone to put money in the ground because they had a very bad experience doing it. We wanted that money back,” Dell said.

“It would be like watching [pharmaceuticals] and saying, I’m not going to invest in any new drug and then be surprised that the pipeline is aging,” he added.

The lack of quality drilling prospects is forcing companies to slow their growth, Dell said.

“One of the reasons nobody wants to grow is that you don’t have a lot of room to run,” he said. (Justin Jacobs, Derek Brower and Myles McCormick)

Data tutorial

It has been a bad day for oil prices, with Brent and WTI trading near 12-month lows. The US benchmark settled at $68.60 a barrel yesterday, 4.3% lower than on the day and almost 45% below the high price it reached after Putin ordered tanks in Ukraine last year. year.

Brent also fell about 4% yesterday after a similar drop on Tuesday. The international marker has lost about $9 a barrel over the past five days.

Recession fears in the US are a major reason for the sell-off. The number of job postings dropped sharply in February; US regional banks appear fragile; and the Congressional debt limit deadlock could leave the federal government without sufficient liquidity by June 1, according to Treasury Secretary Janet Yellen. With such bearish news circulating, the market appears willing to shrug off increased Chinese demand and the possibility of supply shortages later this year.

OPEC+ will not be happy. But oil prices are now about $5 cheaper than when the cartel announced its big cuts in October (and early April). Oil prices would likely be even lower if the cuts hadn’t been made.

Strengths

• Iran grab second tanker in a week as tensions with the United States rise

• Shell, BP and total out of business Vitol, Trafigura, Mercuria and Gunvor

• Pakistan eyes Economic relief from Russian oil imports expected in May

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Energy Source is written and edited by Derek Brower, Myles McCormick, Justin Jacobs, Amanda Chu and Emily Goldberg. Reach us at energy.source@ft.com and follow us on Twitter at @FTEnergy. Stay updated on past editions of the newsletter Here.

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Energy Source is written and edited by Derek Brower, Myles McCormick, Justin Jacobs, Amanda Chu and Emily Goldberg. Reach us at energy.source@ft.com and follow us on Twitter at @FTEnergy. Stay updated on past editions of the newsletter Here.