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By John Sodergreen, editor-in-chief, Jan 27 2016 10:58PM

Lots of News Around the Desk This Week…

So, game on for Trump and Clinton, at long last. Wow. What’s it mean? Dunno, other than the fact that decorum is likely out the window for Decision 2016. Policy details on the energy side are pretty fleeting from the Trump camp and for Clinton, perhaps there are more details, but still plenty of wiggle room on things like fracking and natural gas. Clinton is a climate change adherent for the most part, but to what extent she will push the matter forward, particularly when faced with tepid economic growth, is an open question. Trump never really calls climate change bunk, as do many Republican leaders, but he does note that “far too much attention has been put on climate change,” and that “there are far more pressing things” on the road to make America great again. We think Clinton will eventually adopt a similar line. More on the candidates later … EIA and everybody else reports a general easing of oil and gas production in the lower 48 this month and quarter, which only bodes well for US natty gas producers in 2016. Add a bunch of hot, fickle weather, lots of hurricanes, more coal plant closures and increased exports and we smell a very solid price march north. In Q1 we noted that our tea leaves for the end of Q3 settled around $2.70. At the time, we took a lot of flak for such a high number; now suddenly, it ain’t so nutty. We see that more private equity firms and European energy companies are pointing to natural gas assets and trade desks. Hmm. This could be the breakout year for gas prices after all … According to the latest resource adequacy reports from the various ISOs across this great land of ours, the preliminary verdict is: We should be good to go, given “normal weather,” whatever that means. So far three out of seven US ISOs have filed resources adequacy reports for this Summer: PJM Interconnection is forecasting electricity demand to reach 152,131 megawatts at its peak, and PJM has 183,912 MW of installed generating capacity available to use. More than 8,700 MW of demand response is also available. PJM’s available resources represent a reserve margin of 28.3 percent, well above the required 16.4 percent margin … In the Lone Star State, ERCOT reports that it expects to have sufficient installed generating capacity to serve peak demands for the upcoming Summer season (June-September 2016). The report’s peak Summer load forecast is 70,588 MW and total generation resource capacity is estimated at 78,434 MW. The final summer unit outage forecast is 3,171 MW … ISO-NE reports that under normal weather conditions this Summer, electricity demand is forecasted to peak at 26,704 MW while total resources top out at 30,247 MW … S&P Global released a Ratings Direct report this week that is worth a look: “Climate change-related legal & regulatory risks for financial services companies.” Despite widespread discussion of the various ways that climate change may affect financial services, it remains difficult to quantify that impact accurately. However, in this latest report, S&P shares some key indicators that it will “increasingly use to help us identify which financial services companies are likely to be hardest-hit by climate change and which are best positioned to benefit from the opportunities climate change may create …” The new report includes sections on Quantifying The Effect Of Climate Change Starts With Good-Quality Data, Changing Attitudes Could Bring New Responsibilities, The Tangible Financial Impact May Initially Be Low, But Will Grow, Indicators For Measuring Exposure To Climate Change and This Emerging Risk Has Long-Term Implications. See it at http://www.spcapitaliq.com/our-thinking/ … File this under, ”there they go again.” Iran threw a hissy this week and threatened to close the Strait of Hormuz unless the US and its belligerent buddies play nice. Let us not forget that most of Iran’s oil flows through the straits as well. According to a statement by Brigadier General Hossein Salami, the deputy commander of the Revolutionary Guard, “If the Americans and their regional allies want to pass through the Strait of Hormuz and threaten us, we will not allow any entry,” Salami said. “Americans cannot make safe any part of the world.” He might be right. Perhaps candidate Trump might consider bringing democracy to Iran, as an add-on to his Iran strategy. Perhaps candidate Clinton might follow suit. So, where do the front-runners stand on energy matters? We read an excellent summation on the Center on Foreign Relations (CFR) website this week. You can compare and contrast all candidates with a single click. GOPish candidate Donald Trump says he does not believe that climate change is a significant environmental challenge, and he doubts that humans are contributing factors. “I consider climate change to be not one of our big problems,” Trump said in September 2015. He says the Obama administration has wasted billions on green energy programs. In October 2015, Trump characterized the Environmental Protection Agency as a “disgrace” and said he would significantly cut the agency back. In addition, Trump has called for expanding domestic production of oil and gas, and has said that hydraulic fracturing “will lead to American energy independence.” If elected, he pledges to immediately approve the Keystone XL pipeline. Construction of the project would have brought “no impact on environment and lots of jobs for the US,” Trump said. CFR says that Hillary Clinton describes herself as “a proven fighter against the threat of climate change,” having led the Obama administration’s 2012 establishment of a global initiative to reduce short-lived climate pollutants. In July 2015, Clinton said that as president she would aim to “make the United States the world’s clean energy superpower,” and announced two proposals to fight climate change: the installation of more than half a billion solar panels by the end of her first term, and the generation of enough renewable energy to power every US home within 10 years. She has vowed to fight Republican efforts in Congress and the courts to undo President Obama’s Clean Power Plan, which set carbon emission limits on the states. She also says as president she would unveil a “Clean Energy Challenge,” a broad federal program that would partner with states, cities and rural communities on renewable energy, power grid resilience and air pollution control. Also, drilling in the US Arctic and the revival of the Keystone pipeline are off the table, she says. (For now). On fracking, Clinton has not explicitly supported the extraction technique, CFR says, “but she has referred to the positive effects of the US natural gas boom.” Go to http://www.cfr.org/campaign2016/ … Deloitte’s M&A trend report 2016 has some good news and some bad news. The good news is that the latest survey found that deal activity is expected to remain strong this year. Almost nine in 10 respondents expect deal activity to continue at the same pace or increase from last year. While private equity investors (PEI) were the most optimistic, they are less bullish than they were a year ago, the report said. Corporate respondents and private equity investors cited economic conditions as the top factor for deal success. Both segments of respondents cited interest rates as the second most important factor, followed by uncertainty surrounding the 2016 US elections. The report noted that corporations see an increase in both smaller strategic deals and major transformational deals. “As respondents look at the next 12 months to take advantage of favorable opportunities, 34 percent will look for smaller strategic deals while another 26 percent indicate they will seek major transformational deals,” Deloitte says. Where are they looking? Both corporates and PEIs are continuing to source foreign targets at the same pace as 2015 (75 percent and 84 percent, respectively). And finally, we can expect more divestitures this year. “Significantly more corporate respondents plan to pursue divestitures this year than in 2015. The drivers? Shed noncore assets in the year ahead, help focus their business and in some sectors, raise capital. Lots of good tidbits in this one. The report is at http://www2.deloitte.com/us/en/pages/mergers-and-acquisitions/articles/ma-trends-report.html?id=us:2em:3na:matrends16:eng:cons:050416. The Obama administration’s transatlantic trade deal (TPP) that will never see the light of day drew yet another irrelevant detractor this week – France’s President François Hollande. The WSJ reported that he opposed the current version of a transatlantic trade deal because of compromises on “agricultural, environmental and cultural issues.” No elaboration offered and none requested … Expect more of this … Spent $33 million on what? Investors voted Thursday at Duke’s annual meeting on a shareholder proposal to disclose more about its lobbying and membership in various industry-friendly advocacy groups. The vote failed. Records presented by investor groups claim that the company has spent more than $33 million in federal lobbying in the past six years. The site www.opensecrets.org says that electric utilities ranked sixth-highest in lobbying spending in 2015, at $117 million. The site further claims that Duke has spent $2.5 million on federal lobbying this year so far, and $5.7 million on federal lobbying in 2015 … Hey, if you happen to be in Houston next Tuesday around happy hour … We ran into BroadPeak Partners’ Tom Eisner this week at the FIA legal and compliance gig in Baltimore. He noted that the data integration software firm (ask him about trade surveillance) would be hosting a happy hour (food and booze) from 5 to 7 at The West End – A Public House – at 5320 Westheimer, in Houston, on Tuesday May 10. Register for free to attend at https://www.eventbrite.com/e/meet-n-drink-the-broadpeak-happy-hours-tickets-25140397606 ... Speaking of the FIA gig in Baltimore, the joint was jumping for three full days this week, with close to 1,000 lawyers, regulators and related folks on hand. Quite a show. It was technically off the record unless you (we) received permission from panelists to run their comments. We did. We sat in a very solid panel on spoofing and another on Regulation AT. See the Drums Along the Potomac column this week … And finally, we have some sad news. Our newsroom’s longtime mascot, a 100-plus pound, 13-year-old yellow lab named Ferc passed away this week. He will be missed … And so, there it is …

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