On Wednesday, March 22nd Guttman Energy hosted its 2017 Energy Forum in Canonsburg, PA, the energy epicenter of Pennsylvania. We’d like to thank our customers and business partners who attended. For those of you who weren’t able to attend, following are highlights of the presentations delivered by our guest speakers.
Stuart Hoffman, Chief Economist – PNC Financial Services Group
Acknowledging the uncertainties that come from a new presidential administration, Hoffman identified the upside potentials and downside risks. His team forecasts real GDP growth of 2.4 percent this year and 2.7 percent in 2018. That’s because the U.S. economy is in solid shape, and fiscal policy should stimulate growth.
The upsides, as Hoffman sees them:
- Expected tax cuts for individuals and businesses
- More federal spending on infrastructure and defense
- Deregulation of key industries (Energy production & financial services industries)
- Favorable economic conditions (Strong job growth, lower unemployment, gains in housing and auto markets)
Downside risks to economic growth, however, are bigger than last year:
- Trade disputes
- A stronger dollar
Michael Krancer – Senior Counsel, Energy at Blank Rome LLP and Co-Founder at Silent Majority Strategies, LLC; and Keith Naughton – Co-Founder & Principal at Silent Majority Strategies, LLC
Key points made by Krancer and Naughton include:
- Political risk rather than technological risk is the number one risk to the energy industry
- Where the public goes, elected officials and regulators will follow
- Three categories of risk:
- Technological
- Financial
- Political
- Political risk can only be mitigated with direct action.
- Krancer and Naughton closed their discussion with guidance on how the industry can leverage messaging to mitigate political risk:
- Make it personal
- Diversify
- Stories beat statistics
- Work in the “fear” space
Jeff Quigley, Director of Energy Markets – Stratas Advisors
Quigley provided an oil and natural gas price outlook for 2017. Key takeaways included:
- While the OPEC deal has created substantial optimism, the market has balked at bearish indicators
- If OPEC deal remains in place, $60/bbl Brent remains likely by the end of the second quarter
- Global economy is growing, but key unknowns continue to drive high – and likely sustained – volatility
- NGL prices, though tied to oil, will see some softness due to natural gas prices
- Normal weather patterns will keep gas prices flat until future investment comes through
- New capacity from power generation, industrial producers and infrastructure to drive greater opportunities for Marcellus producers
Alex Epstein – President and Founder of the Center for Industrial Progress and author of The Moral Case For Fossil Fuels
Epstein encouraged the attendees to become “confident champions” for energy and freedom. To effectively counter the Green argument put forth by activists and media, Epstein maintains that the argument must be reframed from “have minimal environmental impact” to “encourage human flourishing.” Key points made by Epstein in support of this concept included:
- Humans should be powerful producers, intelligently transforming nature to maximize human flourishing;
- The fossil fuel industry is the only industry that can produce cheap, plentiful, and reliable energy for billions of people.
- Fossil fuels are easy to misunderstand and demonize, but they provide important benefits:
- Provide power in developing countries to provide clean water, improved living conditions, reduced disease, and improved health care.
- Fossil fuels don’t take a naturally safe climate and make it dangerous, they take a naturally dangerous climate and make it safer.
