Marina and I are flying out to one of our favorite cities tomorrow – Paris. You’ll be getting the next Oil & Energy Investor from there.
Paris is one of our main locations to relax and recharge. Over the past several years, it has likewise become a primary site for my meetings with financial and energy trend setters in an increasingly challenging market environment.
Once again, I find my stay divided. It has become an ongoing personal “tale of two cities.”
Upon each arrival, Paris contains what I expect and what has been necessitated by very recent changes in the energy terrain. As veteran Oil & Energy Investor readers well know, these revisions have sometimes occurred while we were in the air.
It’s going to be that way again.
White House Moves are Rearranging Global Energy – and Not in America’s Favor
There are a couple of traditions on how Paris obtained the urban epithet “City of Light(s).” One comes from the seventeenth century and reflected the city’s central positon in the rise of “The Enlightenment.”
Another emerges from the early eighteenth century and a police request that citizens put a lighted candle or oil lamp in the window, providing more illumination on the streets outside, thereby contributing to a reduction in the crime rate.
But I have always favored a third. It not only nicely provides the image conveyed by the title, but also is an appropriate segue to our main interest here in Oil & Energy Investor – energy.
In 1820, Paris introduced a public gas lighting system created by the engineer Phillipe LeBon. He never lived to see his creation at work. LeBon had been assassinated sixteen years earlier on the coronation eve of Napoleon I (i.e. Napoleon Bonaparte). It had been for that occasion that his “thermolampe” had been invented. LeBon’s curious murder remains a favorite subject for French crime aficionados (punctuated by a bottle of wine or two).
Now, Paris was not the first to introduce a citywide system of street lamps. London had gained that distinction earlier in the century with a coal gas system following a decree from Parliament. But the unusually beautiful way LeBon’s invention lit up Paris streets (providing unusual city landscapes that quickly became labeled “streetscapes”) resulted in what commentators considered the greatest urban view of the age.
Today, there are some 300 landmarks within the city limits of Paris decked out each evening in panoramic lights, augmented by spokes of street lamps connecting them and all parts of the city. Anybody flying into Paris at night is presented with a striking image not easily forgotten.
When we arrive Wednesday morning local time, a fair amount of my next two weeks has been thrown into a series of rapid revisions – thanks to what I label “unanticipated consequences” coming from the latest White House moves.
As I have remarked previously in Oil & Energy Investor, my meeting in Paris is to be followed in short order by my flying to Frankfurt and meetings with Iranian ministerial and energy officials. Shortly thereafter, I was to accept an invitation to address the Iranian Oil Summit in Tehran.
Well, Trump threw that last trip for a loop by issuing an Executive Order preventing travel to the U.S. from seven Islamic countries, including Iran. Tehran responded in kind over the weekend by refusing to issue visas for U.S. citizens. This morning, Iraq did the same thing.
So much for my trip to Tehran.
But the problems extend well beyond my inconvenience…
Even More Serious Problems are Coming
And on that score, some of the changes in my Paris agenda are telegraphing more serious problems to come. These were not part of the White House plan but comprise genuine and disturbing fallout from a disjointed foreign policy still run by executive directives, 140-character tweets, and no outside involvement whatsoever.
As I write this, there are two serious unanticipated consequences revising my upcoming meetings.
First, a broader global Muslim backlash to the Trump immigration order is well underway. It threatens to marginalize the U.S. in a region where our interests are interconnected.
The backlash includes nations not directly under the ban, ostensibly American allies in the fight against terrorism (Saudi Arabia, Jordan, Kuwait, even the United Arab Emirates); it also involves an ally in which the U.S. has injected billions and lost thousands of lives…
Iraq is on the “list of seven,” a matter that has my contacts in Baghdad enraged. As one in the Iraqi Oil Ministry declared during a cryptic exchange on Sunday, “What was the point for the pain and sacrifice of the last 13 years, if Washington now views Iraq as an enemy?”
Several of my colleagues from Islamic countries have voiced an opposition to working further with American companies or U.S.-initiated and/or funded projects. That is going to make the Paris meetings that much more difficult.
Forget the media observations indicating our primary security concerns do not flow from the seven nations listed or that more problems have arisen from other Middle Eastern and Muslim countries with which Trump the businessman has active financial interests and are not on the list.
I do not care about the partisan points being made on either side. The immigration ban has been a move directed to fulfill a campaign pledge rather than advance genuine policy. But it’s having some potentially very dangerous collateral damage beyond U.S. borders…
America May Start Being Excluded from Energy Deals
As the only American at the meetings in Paris – all the heavy hitters I advise at these sessions come from someplace else – my approach is likely to be a “walking the tightrope” exercise. I have no interest in defending the Trump approach or piling on it in opposition.
The focus in Paris, and in the Frankfurt meetings with the Iranians coming up shortly thereafter, is to identify where the energy investment themes are going and how I can give you some early heads up on how to profit from it.
Which makes the second “unanticipated consequence” even more disturbing.
There is a move afoot to structure major global energy initiatives without American involvement.
Late Saturday evening, I received a change in emphasis for a seminal element in the Paris sessions. It requested that my advisory brief include a provisional estimate of the most effective ways to structure non-American networks for finance, operations, and risk adjustment on multi-billion-dollar (should we now say euro?) initiatives in traditional hydrocarbons (oil and natural gas), solar and biofuel energies, transport, and the related bank paper to facilitate them.
I’ve often said in Oil & Energy Investor that geopolitics impacts energy investments. Now it appears that I’m being thrust right into the center of it. This is going to be difficult.
Stay tuned for my next briefing, from Paris.
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