We’re Going to Need More Everything
Plus terrible policy, the next investment wave, and ESG isn’t actually dead
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If we aren’t going to let price affect demand, then we’re going to need more supply of everything.
More fossil fuel production to account for Europe’s transition away from Russia, more commodities to electrify everything, more seafood for a growing population.
It’s terrible policy, but it’s what we’re going with.
Unlike war times of the past, there is no global push to moderate demand.
Our politicians have no stomach to suggest that we must all share this burden. Our public has no interest in giving up SUVs or 80mph speed limits.
A successful energy transition requires not just new infrastructure, but a new mentality.
High prices are the perfect motivation to change behavior, but it seems we are intent to keep things the same.
+California Gov. Gavin Newsom Proposes $400 Debit Cards for Car Owners, Free Transit, Gas Tax Cuts - WSJ
+Oil tax cuts help Kremlin and punish Ukraine - Bloomberg
The Economy of More
Needing more of everything requires massive investment in some new things.
According to McKinsey, “here comes the 21st century’s first big investment wave.”
The shift to clean fuels is “less an energy transition than a commodity transition”.
+The transition to clean energy will mint new commodity superpowers - The Economist
ESG isn’t actually dead.
In the wake of Russia’s invasion of Ukraine, pundits were quick to point out that ESG was dead.
We instantly needed more oil and more guns. Russian investments that went to zero were found throughout the financial system.
However, the less exciting world of proxy voting has chugged along regardless and ESG issues continue to move the needle.
+US ESG resolutions up 22% to record level for 2022, study finds - Reuters
Companies without ESG policies stand out as easy targets.
“In contrast to such competitors as McDonald’s, Burger King and Taco Bell, Jack in the Box currently has no goals aimed at improving the sustainability of its packaging.”
+Record-breaking 95% of Jack in the Box shareholders defy management to support Green Century packaging proposal - Green Century Funds
That a company’s management could be so out of touch with its shareholders just shows that there is still plenty of work to be done, but also low hanging fruit.
The Ocean Five
The five key sectors that make up the ocean economy include shipping, ports, seafood (fisheries and aquaculture), ocean energy (ocean renewables and offshore oil and gas), and coastal and marine tourism.
Here are some stories in the ocean economy that caught my eye this week.
Ocean Energy - Deep sea mining and offshore wind
The search for needed minerals in the energy transition has already spilled over to our oceans.
A battle in the notoriously opaque zone of the high seas is being played out in real time.
“Deep-sea mining in international waters is currently illegal, and environmental organizations, scientists, and many governments want to keep it that way. They argue that the practice could irreversibly harm one of the planet’s remotest ecosystems, one of the few places on Earth that has largely escaped human disruption.”
+Deep sea mining could begin next year. Here’s why ocean experts are calling for a moratorium - Grist
A few weeks ago, we highlighted the massive interest in a recent offshore wind lease auction in the US.
Progress in offshore wind development continues to roll on.
+Biden administration sets date for next offshore wind lease sale off the Carolinas - gCaptain
+Netherlands plans to double offshore wind capacity by 2030 - gCaptain
Ports / Shipping
The war in Ukraine continues to affect major infrastructure partnerships and investment as companies offload or just abandon projects in the region.
+Maersk selling stake in major Russian terminal operator - JOC
Seafood
Just as the battle for minerals is being played out on the high seas, so is the battle for food.
“the number of vessels identified as harvesting jumbo flying squid in the region has risen almost a hundredfold in the past three decades, from six in 1990 to 575 in 2020. Despite this growth, the SPRFMO (South Pacific Regional Fishery Management Organization) did not have any conservation measures in place for squid until 2020”
+Who controls the distant water squid fishing fleet? - C4ADS
So, who controls the fleet? Spoiler alert:
+Chinese IUU fishing is destabilizing maritime security - Taiwan News
Seaweed - Before it was cool
As capital and interest continues to dive into seaweed, it is interesting to learn about the people who were influential in this space before it was cool.
“There is no doubt… that Abbott’s work was foundational for current research into seaweed, a broad category of algae.”
+How the ‘First Lady of Seaweed’ changed science - Atlas Obscura
Tourism
Speaking of seaweed, too much of a good thing?
+Mexican Caribbean destinations adding sargassum barriers in April - Travel Pulse
And stretch…
It can be stressful out there. Here’s a little reminder to breathe deep and stretch.
Thanks for reading. Have a great weekend. Please like or share if you enjoyed it!
Doug