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Originally Posted by Tiny
Not to brag, but this topic is to me as economics are to LL and CM. A decent sized independent E&P company would have to be super profitable to only reinvest half of its free cash flow in the business, year after year, and not self-liquidate. I don't think there are any out there that can do that. The company wouldn't be able to replace reserves or maintain production. It would shrink.
As to 2050, true, Biden's goal is to get to net zero carbon emissions before then. However, another of his goals is to reduce carbon emissions by 50% to 52% by 2030, beneath 2005 levels. If his goals are met, your long term investments in mid stream companies are toast, unless you get out before the shit hits the fan.
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Hear is another interesting article. It leads me to believe that economics, not politics are responsible for lower oil production in this country. While this article does address your political concerns...it really all comes down to the bottom line.
https://www.npr.org/2021/03/06/97364...s-oil-not-more
But U.S. oil producers don't coordinate like that. They turned all that Wall Street money into as much oil as they could possibly pump — oversupplying the market and keeping prices down. When they did make money, they poured it right back into more drilling, instead of taking it as profit.
That left many companies overextended, indebted and struggling — and that was before the pandemic caused an acute crisis for the entire oil industry.
How bad was this for investors? Manas Satapathy, a managing director at the consulting firm Accenture Strategy, points to exchange-traded funds like PSCE and FRAK, which track the performance of many U.S. oil producers.
If you'd invested a dollar in 2016, you'd have lost about 60% of your investment by the start of 2021. If you'd invested the same dollar in the S&P 500, you'd have doubled your money.
Of course, not everyone lost money in the oil boom. Investors who timed it right saw returns, oil executives got big paychecks, and oil workers and the businesses that serve them had some very good years.
But a lot of the big banks, retirement funds and other investors who funded the oil boom saw nothing close to the returns they had expected.
"Many of the investors have left with a bad taste in the mouth, and are not going to come back anytime soon," Satapathy says.
