C.O.B. Tuesday

Today we were thrilled to welcome Premier Danielle Smith of Alberta. Premier Smith was elected in October 2022 and previously served as MLA for Highwood and as Leader of the Official Opposition in Alberta’s Legislative Assembly. Most recently, she was President of the Alberta Enterprise Group. Before re-entering politics, Premier Smith spent several years as a talk radio host and has a diverse background spanning media, public policy, and business. As Premier, she has prioritized economic growth, energy development, and the defense of provincial jurisdiction. It was our honor to host the Premier for an insightful conversation on recent developments in Alberta and across Canada, the future of Canadian energy, and the evolving U.S.-Canada energy partnership.   In our conversation, we explore Canada’s historical energy policy challenges, including tensions between federal and provincial jurisdiction over natural resources, and Alberta’s vast oil and gas endowment. Premier Smith discusses shifting federal attitudes and growing recognition that national energy policy needs rebalancing and also outlines Alberta’s recent legislation aimed at streamlining energy project approvals and restoring international investment confidence. We discuss the need for durable, cross-party support to ensure long-term infrastructure investment, Alberta’s experience with Keystone XL, the risks posed by sudden policy reversal, and the recent surge in proposals for AI datacenters in Alberta. Premier Smith shares her perspective on the two sides of Prime Minister Carney (the pragmatic banker versus the GFANZ advocate), the history and impact of international campaigns to defund Canada’s oil sands, and Alberta’s “all of the above” approach to energy abundance. We examine Canada’s lagging economic growth relative to other developed countries, the hope for a shift back to a growth-oriented mindset toward energy development, and the potential for U.S.-Canada pipeline collaboration, particularly if projects are structured to reduce political risk by involving U.S. companies. We cover Canada’s LNG development, including the first shipment from Kitimat and growing momentum in British Columbia, Nova Scotia, and Quebec, natural gas’s long-term role as both a transition and destination fuel, the importance of integrating with the U.S. pipeline network, the need to resolve U.S.-Canada tariff disputes to unlock investment and advance cross-border energy partnerships, and more.   As mentioned, the letter from Canadian energy CEOs to the Prime Minister, “Build Canada Now: An Urgent Plan to Strengthen Economic Sovereignty,” is linked here [https://www.tcenergy.com/newsroom/statements/2025-03-19-build-canada-now-an-urgent-plan-to-strengthen-economic-sovereignty/]. Premier Smith’s list of nine priorities for Alberta presented to the Prime Minister linked here [https://www.todayville.com/premier-smith-presents-prime-minister-carney-with-list-of-alberta-demands/]. We greatly enjoyed the discussion and appreciate Premier Smith for joining.   Mike Bradley kicked off the show with commentary on U.S. markets, noting that both bond and equity markets were being negatively impacted by the rise in the 30-year bond yield above 5%. Despite June CPI printing slightly below expectations, U.S. bond yields moved higher on Tuesday. He added that June PPI, set to be reported on Wednesday, could pave the way for a rate cut at the September FOMC meeting if it too prints below expectations. On the crude oil market front, WTI price has pulled back ~$2/bbl (to $66.50/bbl) this week. Oil traders were hopeful that President Trump would impose new sanctions on Russian oil (as high as 500%), but he instead proposed a 50-day wait period before imposing a 100% sanction increase. Turning to energy equities, he highlighted that SLB will kick off Oil Services Q2 reporting on Friday, with the other Big 3 OFS names and pressure pumpers reporting

Today we were delighted to welcome Jack Belcher and Sarah Venuto of Cornerstone Government Affairs, along with Brook Papau, CEO of Orennia, for a discussion focused on the energy implications of the One Big Beautiful Bill (OBBB). Jack, a Principal at Cornerstone, has over 30 years of experience in energy and energy policy, having previously served as Manager of Regulatory Affairs and Policy at Shell and Staff Director for the U.S. House Subcommittee on Energy and Mineral Resources. Sarah, Principal and Counsel, joined Cornerstone in 2023 following roles as Director of the Office of External Affairs at the Federal Energy Regulatory Commission, Senior Advisor and Chief Counsel to Senator Joe Manchin, and Democratic Staff Director for the Senate Energy and Natural Resources Committee. Brook founded Orennia in 2021 and previously served as Managing Director at RS Energy Group (now Enverus). Between Jack, Sarah, and Brook, we had a wealth of insight and expertise that fueled a thoughtful and detailed conversation.   In our discussion, we explore the implications of the OBBB for U.S. energy policy, including a shift in emphasis toward fossil fuels (particularly natural gas), along with a renewed focus on reliability and dispatchability. Jack shares his perspective on the “winners” (oil and gas, nuclear, geothermal, and hydrogen) and “losers” (wind and solar), major changes to clean energy tax credits, and the pullback of unobligated funds from federal agencies reclaiming money originally authorized under the IRA. We discuss the introduction of Foreign Entity of Concern (FEOC) restrictions across tax credits, intended to accelerate the reshoring of critical supply chains, and how the current energy tax credit framework increasingly aligns with Trump Administration energy priorities. Brook shares implications for the U.S. grid and power mix, including anticipated delayed retirements of natural gas facilities, a near-term rush to install solar, wind, and storage while tax credits remain in place, severe supply chain constraints for new thermal generation, and growing post-2028 uncertainty as AI-driven demand growth threatens to outpace renewable power additions for the first time. Sarah describes the evolving U.S. energy policy landscape, with regulatory loosening across federal agencies, reduced enforcement capacity due to staffing cuts, and a return to traditional energy provisions, including reinstated onshore and offshore lease sales, lowered royalty rates, renewed support for drilling in Alaska, and accelerated tax treatment for intangible drilling costs. We examine the continued bipartisan support for nuclear, growing cross-party momentum for reshoring advanced manufacturing and critical supply chains, the inflation implications of phasing out tax credits, the partial permitting reforms included in the bill, the importance of codifying reforms into law to avoid policy reversals, early industry reaction to the bill, and much more. As mentioned, a few slides from Orennia’s latest report on the OBBB are linked here [https://mcusercontent.com/59b28891a6a2c8ca6e839d5d2/files/7e818711-a01e-12e0-d364-ecfb280e3c7b/The_Final_One_Big_Beautiful_Bill.pdf]. It was an engaging and insightful conversation, and we greatly appreciate Jack, Sarah, and Brook for sharing their perspectives.   Mike Bradley opened the conversation by highlighting broader equity market performance, recent OPEC+ developments, and President Trump’s surprising proposal to implement a copper import tariff. On the broader equity market front, markets have mostly moved sideways this week after posting all-time highs last week on passage of the One Big Beautiful Bill. Trumpatility is beginning to resurface ahead of President Trump’s July 9th tariff deadline. Upcoming CPI and PPI reports, due next week, could significantly influence whether the Fed moves to cut interest rates at the July 30th FOMC Meeting. Additionally, Q2 reporting begins

We are very pleased to share a special Fourth of July edition of COBT. Earlier in the week, we had the opportunity to tour the Lone Star Flight Museum [https://lonestarflight.org] (LSFM) and to sit down with Jerry Scott, LSFM’s Chief Operating Officer and Director of Flight Operations. The museum draws visitors from all over the world and features flying historical aircraft, many of them iconic military planes. Jerry was named COO in June 2024 and has 40 years of experience in aviation sales as well as people, project, and logistics management. He previously served as a volunteer at LSFM for 15 years and as a crew chief and plane captain for several of the museum’s aircraft. For our conversation, we sat right next to a B-25, the same type of aircraft flown by Jimmy Doolittle and his squadron. This particular plane has been meticulously restored to the exact standards of the Doolittle Raiders’ aircraft, making it an especially unique setting for our discussion. We were thrilled to visit with Jerry and to get to spend time with the team at the museum. Special thanks to LSFM’s CEO Anna Hawley for all her help in particular.   In our conversation, we explore the parallels between modern military missions and World War II operations, the extraordinary bravery of the Doolittle Raiders, the unique similarity of the Doolittle mission to the recent US strikes on Iran, and Jerry’s personal journey and passion for aviation. We discuss LSFM’s mission to honor veterans and preserve their stories for future generations through a living, flying museum, the pilot training progression required to fly historic aircraft, the museum’s move from Galveston to Ellington Field after Hurricane Ike, and the critical role of volunteers in keeping the operations running. Jerry shares insights into the museum’s reach, welcoming over 100,000 visitors annually, its rotating aircraft exhibits, and its broader community impact through educational programs and events. We reflect on Jimmy Doolittle’s legacy, the spirit of innovation and sacrifice that defines American aviation history, and the museum’s vision to inspire future leaders. As mentioned, the “Thirty Seconds Over Tokyo” film is available on Amazon Prime (linked here). A huge thank you to Jerry and the team at LSFM for their support in making today’s episode possible. We highly recommend planning a trip to the museum to see the aircraft up close!   To start the show, Mike Bradley highlighted a handful of key events that influenced markets in 1H25 including President Trump’s import tariffs (Day of Liberation), Trump’s One Big Beautiful Budget Bill (OBBB), the Israeli-Iranian War/U.S. strike on Iranian nuclear facilities and OPEC’s substantial/surprising accelerated oil output hikes.   For our Canadian friends, we hope you had a fantastic Canada Day on Tuesday. For everyone celebrating the Fourth today, we hope you have a great day filled with food, family, friends, and fun. God bless you, and God Bless America.   Have a wonderful Independence Day!

Today we had the very exciting and interesting opportunity to visit with Jim Grech, President and CEO of Peabody. Jim was appointed as CEO in June 2021 and brings more than 30 years of experience across the coal and natural resources space. His career includes leadership roles as CEO of Wolverine Fuels, President of Nexus Gas Transmission, EVP and CCO of CONSOL Energy, and Vice President of DTE Energy. Peabody, founded in 1883, is one of the leading coal producers in the U.S., operating 17 surface and underground mines across the U.S. and Australia. We were thrilled to hear Jim’s perspective on the evolving role of coal in both the U.S. and global energy markets.   In our conversation, Jim shares background on his decision to join Peabody during a period of financial and market uncertainty and outlines the company’s progress in recent years, including repayment of $1.5B in secured debt, reinstatement of a dividend and stock buyback program, and reinvestment in U.S. and Australian assets. We discuss how to motivate a coal workforce amid global anti-coal sentiment, Peabody’s asset footprint, the strategic importance of the Powder River Basin (PRB) and the untapped potential to export PRB coal to Asia, the advantages of U.S. coal relative to coal in other parts of the world, and the vast abundance of U.S. coal, with U.S. coal reserves containing more energy than any other nation holds in any single energy resource. We explore the distinctions between thermal and metallurgical coal, global coal demand and outlook, the longevity of coal infrastructure with new plants expected to operate for 30-50 years, the improved environmental footprint of modern coal plants and outdated misconceptions, coal’s role in poverty reduction and economic growth in developing nations, and the push to codify U.S. regulatory changes into legislation for permanence beyond changing administrations. Jim shares his perspective on coal’s role in grid stability and delivering lower, more stable electricity prices, state-level legislative trends supporting reliability requirements for coal plants, the current status and underutilization of the U.S. coal fleet, and renewed interest from industrial users and datacenters seeking long-term, dependable power sources. We examine investor trends including the emerging investor focus on international coal markets, international market dynamics and growth opportunities across metallurgical and thermal coal, and much more. We close by asking Jim for his top takeaway, and he highlights the importance of being open-minded about coal’s net benefits, particularly regarding its role in global energy access, industrial development, and improving standards of living. It was our pleasure to host Jim and we greatly enjoyed the discussion.   Mike Bradley opened the discussion by noting that bond, commodity and equity markets have largely roundtripped to their June 12th closing levels (prior to the Israeli strike on Iran). From a bond market perspective, the 10-year bond yield (~4.3%) has essentially roundtripped and traders are now focused on upcoming economic data. In crude markets, WTI spiked to a high of ~$78.50/bbl on Monday following the U.S. strike over the weekend of Iranian nuclear sites, but has since pulled back to ~$65/bbl amid reports of a “proposed” Iranian/Israeli ceasefire, which is ~$3/bbl lower than June 12th price levels and ~$5/bbl above June trading lows. From an Energy equity standpoint, Energy has also roundtripped and is now trading modestly below (~2%) June 12th levels as energy investors begin refocusing their attention on the 2H’25/1H’26 global oil surplus. From a broader market standpoint, the S&P 500 is now ~0.5% higher than June 12th levels and within 1% of all-time highs. Broader markets are now in the process of transitioning away from Mideast conflict back towards U.S. domestic policy. Mike concluded by noting that investors are beginning to refocus on the odds of Trump’

Today we’re excited to welcome Patrick White, Group Lead for Fusion Energy Safety and Regulation at the Clean Air Task Force (CATF), and Nicholas McMurray, Managing Director of International and Nuclear Policy at ClearPath. Patrick recently joined CATF and leads the organization’s international working group focused on fusion energy safety, waste, and non-proliferation. He holds a Ph.D. in Nuclear Science and Engineering from MIT and previously served as Research Director at the Nuclear Innovation Alliance. Niko is an expert in industrial policy, nuclear energy policy, and regulation. He has been with ClearPath since 2019 and formerly served as a Materials Engineer at the U.S. Nuclear Regulatory Commission (NRC).   A few weeks ago, Veriten partnered with CATF and ClearPath to publish a paper calling out reforms to NRC processes and procedures to accelerate the deployment of new nuclear reactors; establishing a more efficient regulatory framework for new and advanced reactors (paper linked here [https://www.nrc.gov/docs/ML2513/ML25136A333.pdf]). We were thrilled to host Patrick and Niko for a discussion on the paper and broader trends in the nuclear landscape. Brett Rampal, Senior Director of Nuclear and Power Strategy at Veriten, joined for the conversation and led Veriten’s contribution to the paper.   In our discussion, Patrick and Niko share background on their organizations’ missions and long-standing support for nuclear. We explore the need to demystify and modernize NRC processes to accommodate next-generation nuclear technologies, challenges with current regulatory frameworks originally designed for traditional large light-water reactors, the role of licensing structures and the value of more flexible licensing pathways, and the motivation behind their recent paper, which aims to provide actionable, bipartisan policy suggestions to enable nuclear deployment at scale. We examine the historical development and regulatory evolution of power versus non-power reactor definitions, how those distinctions have blurred over time, the shift toward performance-based regulation, and the commercial implications of licensing small reactors under Class 103. We discuss the importance of consistent terminology and regulatory clarity in advancing new nuclear technologies, whether the NRC’s internal culture can evolve to support faster deployment without compromising safety, the NRC’s broader oversight role beyond reactors including medical and industrial applications of radioactive materials, and congressional support for NRC modernization. Patrick and Niko provide insights into international regulatory approaches, such as performance-based models used in the UK, France, and Canada, the critical need to earn public trust through rigorous and efficient safety regulation, the feasibility of President Trump’s goal of having 10 new reactors under construction by 2030, challenges beyond regulation, and much more. We greatly enjoyed the conversation.   To start the show, Mike Bradley noted that the S&P 500 closed modestly lower on the day, while crude oil prices caught a bid amid escalating tensions in the Mideast. On the bond front, the 10-year bond yield (~4.4%) has pulled back over the last few days as markets await the outcome of the June 18th FOMC rate decision meeting. Consensus is for no change in interest rates at this FOMC meeting, but a cut is expected at the September meeting. From a crude oil market standpoint, WTI price has spiked by >$10/bbl to ~$74/bbl over the last five trading days due to the Iranian-Israeli military conflict. While Veriten isn’t in the business of making short-term crude oil price calls based on supply disruption threats, we continue to emphasize that global oil demand growth projections are a more vital determinant for intermediate-term oil prices. On the global S/D front, the IEA recently modeled global oil demand peaking in 2029 (China in 2027), contra