Fossil Fuels Keep Winning
Erin Khoo@erinkhoo
The idea
I believe fossil fuels keep winning as the world stays dependent on oil and gas, so I own the companies positioned to benefit rather than bet against the climate trade directly. The portfolio spreads across producers, the service firms that drill and equip wells, pipeline and LNG operators whose fees and dividends smooth out oil price swings, and gas-powered energy suppliers feeding data center demand.
What it owns
- Pipeline and export terminal operators earn steady fees for moving gas regardless of price swings, providing consistent cash flow. · Cheniere EnergyIt operates the largest US liquefied gas export terminal, earning fees on long-term contracts as overseas buyers choose American gas., Williams CompaniesIt operates major gas pipelines on the East Coast, collecting fees for moving gas that support steady cash flow independent of price., Kinder MorganIt owns one of the largest gas pipeline networks in the US and collects steady fees as gas volumes flow through its system., Energy TransferIt moves oil, gas and gas liquids through a large pipeline system and distributes cash to owners as volumes remain stable., ONEOKIt processes gas liquids that result from oil and gas production, earning fees that grow with drilling activity., Targa ResourcesIt processes natural gas from the Permian Basin and collects fees that increase as production in that region grows.29%
- Companies that pump oil and gas capture the most direct upside from sustained demand and favorable drilling policy. · Exxon MobilIt produces oil and gas globally and reinvests in new production, making it a direct play on sustained demand for fossil fuels., ChevronIt pumps, refines and sells oil and gas, with capital deployment focused on growing production rather than transitioning away from hydrocarbons., EOG ResourcesIt operates low-cost shale wells in the US that remain profitable even when oil prices decline, supporting sustained production., EQT CorporationIt produces the largest volume of natural gas in the US, benefiting as power plants and data centers choose gas over renewables., ConocoPhillipsIt explores for and produces oil and gas with no refining or renewable business, making profits that track directly to fossil fuel demand., Occidental PetroleumIt produces oil from the Permian Basin, a major US shale play, and benefits as Permian output and oil prices remain healthy., Diamondback EnergyIt drills exclusively in the Permian Basin, representing a concentrated bet on US shale oil demand staying strong.28%
- These suppliers win when producers spend on new wells and equipment rather than reducing drilling activity. · SLBIt provides drilling technology and equipment to oil and gas producers worldwide, benefiting from sustained capital spending on new wells., Baker HughesIt builds gas turbines and liquefied gas equipment for both power generation and export terminals, benefiting from growth in both markets., HalliburtonIt provides hydraulic fracturing services to onshore drillers in the US and internationally, winning when drilling activity remains robust., NOV Inc.It supplies drilling rigs and equipment to oil and gas operators, winning when companies invest in new gear rather than deferring spending., TechnipFMCIt manufactures subsea equipment for deepwater oil fields, a technology deployed only when operators expect sustained oil demand.21%
- Data centers choosing onsite natural gas power through fuel cells and turbines avoid grid constraints and drive additional fuel demand. · Bloom EnergyIt makes fuel cells that run on natural gas to power data centers on site, meeting demand for reliable power outside the grid., FTAI AviationIt converts retired jet engines into roughly twenty-five-megawatt gas turbines for data centers, capturing demand for efficient onsite power., GE VernovaIt manufactures gas turbines including models derived from jet engines for data centers and liquefied gas plants, capturing that equipment demand.16%
- Cash6%