Monday report

This AM, WTI traded to $11.36/bbl for May delivery.  I couldn’t find a trade in recent decades at that level.  Turns out it’s a 21-year low.  Now, while this dislocation is at least partially temporary, many investors believe that oil will return to $50/bbl and this is a unique time to buy oil assets cheaply.  And maybe it is…

But let’s remember that the Longview Power “clean coal” plant that was lauded as the most advanced and cleanest coal-fired Coal down, Gas upplant in the world is now seeking bankruptcy protection for the second time in a decade after costing $2.1 billion.  Coal provided only 17.1% of the US power mix for the month of March – a staggering retrenchment from ~46% only 10 years ago.  It is, quite literally, the canary in the coal mine for the fossil industry.

And while auto sales are collapsing, our research shows that EV sales are far less correlated to GDP growth than ICEs.  We see that consumers, based on a myriad of preferences, have been buying EVs and are continuing to do so.  EV growth in the US was expected to have a breakout year in 2020 before the virus started shuttering supply chains.  While we expect that the delay in 2021 model releases will only be modest, we expect that the automakers will divide into two groups – those that lead with their new EV lineups and those that retrench in an effort to conserve cash.  We posit that the future of the auto industry will belong to the former while the latter will ultimately lose market share and impair their brands.  

Many of you have been watching Sir David Attenborough, as I have, for years.  His voice has been the voice of nature for decades.  In this interview, he’s pleading with the world to make the changes necessary to preserve our home by ending the waste – the waste of energy, food, plastics, natural resources, etc. – that currently plagues our society.

It’s worth noting that habitat loss is one of the leading reasons that animals and humans are interacting more and more and why more zoonotic diseases are likely.  While many lament these kinds of ideas as a seeming death sentence for economic growth and frame them as permanent impoverishment for the bottom of the human pyramid, SOIL was founded on the principle that this is exactly the way to unlock both massive economic growth opportunities as well as an increase in the standards of living around the globe – from cleaner air and water to better educational opportunities and healthier foods and supply chains.

We are at a crossroads  – as a species.  In much the same way that we’ve come together across borders to curtail the spread of the coronavirus, so too can we do the same to begin a new era in our collective histories – one of unprecedented value creation and global wealth  – through the financing and deployment of sustainable opportunities and infrastructure around the world.