The pandemic killed demand for oil and gas, leaving the world vulnerable to Putin’s supply-side punch. The upside? Widespread shortages and sky-high prices will finally force meaningful investments in alternatives and even pariahs like nuclear and wood.
The pandemic killed demand for oil and gas, leaving the world vulnerable to Vladimir Putin’s supply-side punch. The upside? Widespread shortages and sky-high prices will finally force meaningful investments in alternatives and even pariahs like nuclear and wood.t was February 2020, travel restrictions hadn’t yet hit Europe, and the big shots of oil were gathered in London for International Petroleum Week.
“The war accelerated where I felt we were headed: to a shortage. It’s going to get worse from here,” echoes Fort Worth, Texas, billionaire John Goff, chairman of Crescent Energy. He’s been scooping up depressed oil assets since 2019. “The world is woefully underinvested, energy transition policies are naive, and demand has yet to peak,” he adds. “I’m all for green energy, but we need a real plan.”
“This decade is going to be one that is structurally bullish for the energy market. There’s more discipline today, plus you’re trying to make up for seven years of underinvestment,” says John Arnold, who retired from active energy trading a decade ago at just 38. In recent years, the billionaire philanthropist has put money into solar farms, nuclear fusion, deepwater oil production platforms and more.
Billionaire Wesley Edens is one LNG newcomer bringing capital to the game. A co-owner of the NBA’s Milwaukee Bucks, Edens, 60, made his first fortune as a cofounder of Fortress Investment Group, a private equity shop he sold to SoftBank in 2017. Now he’s CEO of publicly traded New Fortress Energy, which is developing what it calls “Fast LNG.” Modular natural gas liquefaction units are built in a shipyard and installed on repurposed offshore oil platforms.
“Ramping up takes six months,” says oil billionaire Harold Hamm, 76, whose family owns 80% of Continental Resources, one of the nation’s largest frackers. With drilling costs rising 15% a year, he’s more interested in using the oil-and-gas price spike to pay down debt. He has time on his side. That’s significant because despite all the attention paid to alternatives, fossil fuels—gas, oil and coal—still make up 80% of all energy used worldwide, not much less than two decades ago. One reason is that nuclear power as a share of world energy has not only stopped growing but has actually shrunk—from 7% to 5%—over that period. After the 2011 disaster at Japan’s Fukushima nuclear plant, Japan and Germany mothballed nuclear reactors, offsetting nuclear growth in China. In the U.S.
The AP1000 is a pressurized water reactor, similar to the almost 100 reactors currently operating in the United States, but it’s considered safer because it has a simpler design and more fail-safe systems. It relies on gravity and water to contain and cool a meltdown, which should make it an easier sell to nervous politicians and voters.t’s not just nuclear fusion that requires patience and deep pockets.
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