Natural gas prices jumped Thursday following a multiweek swoon, providing a lift to shares of Club holding Coterra Energy (CTRA), which lately has relied on the commodity for more than half its operating revenues. U.S. natural gas prices rose nearly 4% Thursday to roughly $3.81 per million British thermal units (MMBtu). Coterra shares climbed nearly 3% to over $25 apiece. Thursday’s natural gas gains — on top of a 0.88% jump on Wednesday — reverse some of its recent losses. But only partially. As recently as Dec. 15, U.S. natural gas prices settled at nearly $7 per million British thermal units. So far in 2023, natural gas remains down around 12%. Unusually warm winter weather across the U.S. and Europe is a major culprit for the falling prices. Demand for natural gas fell in response, with less of it is needed to heat homes. Proof is in the data. The amount of working gas in storage actually rose 11 billion cubic feet in the week ended Jan. 6, the U.S. Energy Information Administration said Thursday. That’s the first weekly inventory build in January on record, according to FactSet. Of course, the price of natural gas matters to consumers and their energy bills. It also matters greatly to investors in Houston-based Coterra, the product of a 2021 merger between Cabot Oil & Gas and Cimarex Energy. Coterra has the most natural gas exposure of the three exploration and production (E & P) firms in the Club portfolio, with the commodity accounting for nearly 58% of its operating revenue through the first three quarters of 2022; fourth-quarter results aren’t out yet. Pioneer Natural Resources (PXD), by contrast, has generated 11% of its operating revenue from natural gas over the same span. That figure is roughly 14% for Devon Energy (DVN). Oil and natural gas liquids are the other major products all three E & P companies sell. In a very basic sense, the higher the price of natural gas, the more money Coterra can make from its operations — which ultimately influences the company’s free cash flow and, by extension, its dividend payment. But the company’s realized price in a quarter can be different than the average market prices over that same timeframe. This is because companies like Coterra will enter into agreements to sell natural gas or oil at a predetermined price at a future date. Sometimes, that agreed-upon price will be higher than the market price on that day. Other times, it will be lower. This is what determines the difference between a company’s realized price and the spot price of the commodity in question. Coterra investors still pay attention to the swings in natural gas prices. The company’s sales are not fully hedged, so what happens to market prices does impact the amount of revenue it generates. In an interview with Jim Cramer earlier this week, Coterra CEO Tom Jorden sought to downplay worries about natural gas price declines. “Prices are constructive on both oil and gas, and our returns are really extraordinary at current conditions,” he said Tuesday night. The Club and other shareholders care a great deal about those returns. Coterra employs a fixed-plus-variable dividend, so the payout changes quarterly based on the company’s free cash flow in the trailing three months. The company has committed to returning at least 50% of its free cash flow each quarter to shareholders. Including dividends and stock buybacks, Coterra returned 74% of free cash flow in the third quarter and 80% in the second quarter. At Wednesday’s closing price of $24.69 per share, Coterra’s dividend yield stood at roughly 11%, based on its most recent payout of 68 cents on Nov. 30 . “We can never predict the price going forward, but we can control being good at the business, being disciplined in our investments and managing a prudent, healthy balance sheet,” Jorden told Jim. No doubt, predicting the price of volatile commodities is a tough task. But agencies and research firms still do so. In its short-term outlook issued Tuesday, the U.S. EIA forecasted natural gas prices to average $4.90 per MMBtu this year, down nearly 10% from its prior projection of $5.43. Through the first nine months of 2022, Coterra’s realized natural gas price was $4.79 per MMBtu. This is notable because even though natural gas soared to over $9 per MMBtu at times in the spring and summer of last year, Coterra’s realized sale price wasn’t nearly as high as market prices. This helps explain why the Club hasn’t run for the hills as natural gas prices fell in recent weeks. Volatility is to be expected, and we know Coterra is able to maintain a very attractive dividend even if commodity prices are a bit lower than where they were in 2022. In a very uncertain market environment, being invested in companies that return significant capital to shareholders is a good place to be. Jim said Wednesday morning he believed Coterra was worth buying at current levels, due in part to reassurances Jorden provided on recent reserve write-downs at the company. Elsewhere in energy, the Club trimmed its position in oilfield services Halliburton (HAL) on Thursday. While we still like the stock overall, we wanted to be disciplined due to its recent strength and book some profits. (Jim Cramer’s Charitable Trust is long CTRA, DVN, PXD and HAL . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022.
Hannibal Hanschke | Reuters
Natural gas prices jumped Thursday following a multiweek swoon, providing a lift to shares of Club holding Coterra Energy (CTRA), which lately has relied on the commodity for more than half its operating revenues.
Construction and mining giant Caterpillar has reached a major milestone for its autonomous haulage system (AHS), reaching one million tons (!) of aggregate hauled by the company’s massive self-driving trucks.
The milestone was reached as part of an ongoing collaboration between Cat and Luck Stone’s Bull Run Quarry in Chantilly, Virginia to help demonstrate the worth of Caterpillar’s in-house AHS solution, and goes a long way towards proving to doubters of autonomous technology that AHS has what it takes to safely and dependably operate in a working quarry.
Reaching the one million tons hauled autonomously milestone confirms that autonomous haulage can deliver consistent, repeatable performance. It also signals how autonomous solutions will address skilled labor shortages, improve site safety, increase operational efficiency, and upskill quarry employees to run autonomy.
With the success of the Luck Stone pilot at Bull Run, however, that mining/quarry imbalance may not be the status quo for much longer.
“This milestone is a powerful demonstration of what’s possible when we collaborate with our customers to deliver solutions for their critical needs,” explains Denise Johnson, Caterpillar Group President, Resource Industries. “Reaching one million tons hauled autonomously at Bull Run shows that autonomy isn’t just for mining – it’s scalable, reliable, and ready to transform the aggregates industry. We’re proud to collaborate with Luck Stone to lead that transformation.”
Caterpillar hopes the Bull Run project sets a precedent for the broader aggregates industry, and they continue to explore opportunities to expand autonomy across additional Luck Stone sites and operations.
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links.More.
The Northwest Seaport Alliance has announced the recipients of its inaugural incentive program for zero emission drayage trucks – and they’ve turned to the logistics experts at Zeem to deploy 19 battery electric semi trucks to serve the Seattle-Tacoma gateway.
The Northwest Seaport Alliance incentive program is funded by a $6.2 million grant from the Washington State Department of Transportation (WSDOT), and will see bring 19 zero emission Class 8 semi trucks (like the Kenworth T680, shown) and their associated charging infrastructure to the Puget Sound region.
“We are thankful to the Northwest Seaport Alliance for helping the region adopt electric trucks, and we invite truck operators to experience how well they are matched to the job of hauling drayage,” says Paul Gioupis, CEO of Zeem Solutions. “We have served truck fleets for several years, and our goal is to make it a compelling business decision for fleets, that is both economically and environmentally sustainable.”
19 trucks, hundreds of charging customers
NWSA announcement event, via Zeem.
In a bid to help make electrification an even more compelling option for PNW truck fleets, the new Zeem facility won’t just serve its fleet of 19 electric semi trucks – the project also includes a charging depot that will be able to serve up to 250 electric vehicles per day, with overnight parking capacity for up to 70 vehicles, including heavy-, medium-, and light-duty vehicles.
Advertisement – scroll for more content
“Nearly 4,000 short-haul trucks serve the ports of Seattle and Tacoma, traveling to nearby distribution centers and warehouses,” reads the official press release. “… operators will be able to switch to electric trucks and charging without the large amount of upfront capital typically needed for heavy-duty EVs and charging infrastructure.”
The charging site will be located near the new I-5 exit ramp just south of SeaTac Airport, along SR-99 (International Blvd./Pacific Hwy.), convenient for nearby warehouse and distribution centers that see a large volume of truck deliveries.
Electrek’s Take
Drayage trucks are typically heavy-duty Class 8 trucks that work short haul routes from ports to warehouses or loading facilities. They frequently travel back and forth along local roadways, meaning they have a high impact on air quality in a given area. And, depending on who you believe, truck emissions represent about 6% of all seaport-related diesel pollution and about 30% of all seaport-related climate pollution in the Puget Sound region – emissions that disproportionately impact communities living near port operations and along freight corridors.
As such: more electric drayage is more good news.
We had a chance to talk to Zeem CEO, Paul Gioupis, as one of our guests on Quick Charge last summer, and a lot of that discussion is still relevant today. Give it a listen (above), then let us know what you think of all this in the comments.
SOURCE | IMAGES: Zeem Solutions.
BLUETTI portable power stations offer enough capacity to run power tools, appliances, or even serve as a full-home backup during outages. For extended outages, BLUETTI offers modular systems can keep your fridge, lights, or Wi-Fi going for days. And, if you’re traveling light, the new Handsfree line of backpack power stations offer plug-and-play energy on the go — perfect for remote work, camping, or emergencies.
The California Senate dropped a controversial provision of an upcoming solar law which would have broken long-standing solar contracts with California homeowners after significant public backlash over the state’s plans to do so.
For several months now, AB 942 has been working its way through the California legislature, with big changes to the way that California treats contracts for residential solar.
The state has long allowed for “net metering,” the concept that if you sell your excess solar power to the grid, it gives you a credit that you can use to draw from the grid when your solar isn’t producing.
Some 2 million homeowners in California signed contracts with 20-year terms when they purchased their solar systems, figuring that the solar panels would pay off their significant investment over the coming decades by allowing them to sell power to the grid that they generated from their rooftops.
Advertisement – scroll for more content
But this has long been a sticking point for the state’s regulated private utilities. They are in the business of selling power, so they tend to have little interest in buying it from the people they’re supposed to be selling it to.
As a result, utilities have consistently tried to get language watering down net metering contracts inserted into bills considered by the CA legislature, and the most recent one was a bit of a doozy.
The most controversial point of AB 942 was that it would break rooftop solar contracts early. At first, it was going to break all existing contracts, then was limited to only break contracts if a homeowner sells their home. The ability to transfer these contracts was key to the buying decision for many homeowners who installed solar, as the ability to generate your own power and lower your electricity bills adds to a home’s value.
This brought anger from several rooftop solar owners and organizations associated with the industry. 100 organizations signed onto an effort to stop blaming consumers who are doing their best to reduce emissions and instead focus on the real causes of higher electricity, which the groups said are associated with high utility spending and profits.
It also resulted in several protests outside CA assemblymembers’ offices, opposing the bill. And California representatives received a high volume of comments opposing the plan to break solar contracts.
But, as of Tuesday, the language which would break rooftop solar contracts has been removed by the CA Senate’s Energy Committee, chaired by Senator Josh Becker, who led the effort. Language which blamed consumers for utility rate-hikes was also removed from the bill, according to the Solar Rights Alliance.
The bill is still not law, it has only moved out of the Energy Committee. But bills that advance through committee in California do not usually meet a significant amount of debate when they come to a floor vote, due to the Democratic supermajority in the state. It seems likely that if this bill advances to a vote, it will pass.
Electrek’s Take
The bill is still not perfect for solar homeowners. It disallows anyone with a yearly electricity bill of under $300 from getting the “California Climate Credit,” which is a refund to state utility customers paid for by California’s carbon fee on polluting industry.
The justification is thin for removing this credit from homeowners who are doing even more for the climate by installing solar… but it turns out that limitation probably won’t affect many customers, because most solar customers will still pay a yearly grid connection tax of around $300/year, and most solar customers still have a small electricity bill anyway at the end of the year.
Now, the question of a grid connection fee is another point of possible contention. This has been referred to as a “tax on the sun” in some jurisdictions, and it does feel like an attempt to nickel-and-dime customers who are contributing to climate reductions and should not be penalized for doing so. However, there is at least some rationality in the concept that they should pay to use infrastructure (but then… isn’t that the point of taxes, to build infrastructure for people to use?).
In short, even if it’s not perfect for every solar homeowner, we can consider this a win, and an example of how, at least with functional governments (unlike the US’ one), the public can and should be able to stop bad laws, or bad portions of laws, with enough public effort.
The 30% federal solar tax credit is ending this year. If you’ve ever considered going solar, now’s the time to act. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links.More.