Story of the Week: October 2022

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October 29, 2022 - Why We're Bullish on Energy Stocks
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October 29, 2022 - Why We're Bullish on Energy Stocks

Why We're Bullish on Energy Stocks by Vivek Ramaswamy and David Sokel Appeared in the Wall Street Journal on October 24, 2022 Gina's Thoughts "JP Morgan estimates that by 2030 oil and gas companies will require an additional $1.2 trillion to $1.3 trillion in capital expenditures to meet demand. Chronic underinvestment in production now leaves the world at risk of sustained oil and gas shortages." Is a perfect storm in the oil and gas investment space taking place? The authors are bullish on US energy stocks and believe that if oil and gas companies invest in greater production and meet long-run demand, US energy companies can outperform. Ditto for Canada and Canadian energy companies.
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October 22, 2022 - Will the energy crisis crush European industry?
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October 22, 2022 - Will the energy crisis crush European industry?

Will the energy crisis crush European industry? by Peggy Hollinger, Sarah White, Madeleine Speed and Marton Dunai Appeared in the Financial Times on October 19, 2022 Gina's Thoughts This article underscores how almost every industry in the world relies on oil and gas. Building materials, ceramics, cement, chemicals, glass-making, pharmaceuticals, plastics, fertilizers, steel, paper-making, and automotive are some of the industries that are facing hardship this coming winter due to the energy crisis in Europe. There is a real fear of a deindustrialisation wave hitting Europe. "Soaring energy prices and a lack of supply are currently precipitating an alarming decline in the competitiveness of Europe's energy-intensive companies." Divestment proponents should look at what is happening in Europe to understand that a vote for divestment is a vote against every other industry on our exchanges.
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October 15, 2022 - Chevron chief blames western governments for energy crunch
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October 15, 2022 - Chevron chief blames western governments for energy crunch

Chevron chief blames western governments for energy crunch by Derek Brower Appeared in the Financial Times on October 13, 2022 Gina's Thoughts This week, the CEO of one of the biggest companies in the world spoke out against the effort to transition from fossil fuels. Mike Wirth, Chevron's CEO said "this premature transition has resulted in "unintended consequences," including energy supply insecurity from crisis-hit Europe to California." He went on to say "despite heavy global investment in renewables in the past 20 years, fossil fuels still met about 80 per cent of global demand. "The reality is, oil and gas is what runs the world today. It's going to run the world tomorrow and five years from now, 10 years from now, 20 years from now." Another reality Wirth talked about is the fact that "the source of the energy crunch predated Russia's invasion and followed years of under-investment in new oil supply." Demand for energy has continued to rise and investment in oil and gas projects is about half the rate it used to be. Chevron will continue to operate as an oil and gas company and as such, will continue to increase oil supply. Wirth does not apologize for supplying a product that society wants and needs and that improves quality of life around the globe.
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October 8, 2022 - Banks at Greater Reputational, Legal Risk From Global Climate Pledges
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October 8, 2022 - Banks at Greater Reputational, Legal Risk From Global Climate Pledges

Banks at Greater Reputational, Legal Risk From Global Climate Pledges by Rahul Vaidyanath Appeared in Epoch Times on October 5, 2022 Gina's Thoughts Last week, JP Morgan Chase CEO Jamie Dimon said that the bank would continue to make new investments in major oil and gas development projects. Now, in this week's article, we learn that some of the bigger US Banks are thinking of exiting Global Alliances such as GFANZ (Glasgow Financial Alliance for Net Zero), "the self-described world's largest coalition of financial institutions committed to transitioning the global economy to net-zero greenhouse gas (GHG) emissions". Canada's banks are not there yet. The big Canadian banks are all members of GFANZ and while they may be starting to get nervous about reputational and legal risk from global alliance climate pledges, they are not at the point of leaving. Ross McKitrick, an economics professor at the University of Guelph takes issue with global organizations dictating broad restrictions on a country's firms. "Banks should evaluate loans to the oil and gas sector based on the usual financial criteria of risk and reward. But they absolutely should not be allowed simply to shut off funding to a major economic sector for reasons of activism and politics." This is why the divestment agenda must be rejected, especially in Canada where the oil and gas sector is the backbone of the Canadian economy and keeps the economy humming.
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October 1, 2022 - Reality Is Setting In: Jamie Dimon's Testimony Caps A Confrontational Energy Week
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October 1, 2022 - Reality Is Setting In: Jamie Dimon's Testimony Caps A Confrontational Energy Week

Reality Is Setting In: Jamie Dimon's Testimony Caps A Confrontational Energy Week by David Blackmon Appeared in Forbes on September 22, 2022 Gina's Thoughts The road to hell is paved with good intentions. JP Morgan Chase CEO Jamie Dimon rejected taking the "road to hell" also known as "the divestment agenda" at congressional hearings on Capitol Hill this past week. The CEO of one of the largest banks in the world "informed his inquisitor that his bank would not refrain from making new investments in major oil and gas development projects, telling the members when asked that question "Absolutely not, and that would be the road to hell for America." Instead, he said "the world needs proper investing in the oil and gas complex." Two CEOs in two weeks eschewing divestment in favour of investment in oil and gas makes for a good two weeks.
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