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Strategic & Financial Arguments(TM)
for the pulp and paper industry worldwide

July 2019

Participating as industry experts in pulp and paper financing and M & A deals around the world  for over two decades, we continue to see the same mistakes made over and over.  This newsletter is designed to help you avoid costly mistakes we have seen others make.  We will be giving you one or two points each month to help improve your performance.
 
Energy Assets last a very long time

By Jim Thompson
 
The first energy crisis occurred within four months of the beginning of my professional career way back in 1973.  For a few decades, an effort was made to assure energy independence for the United States.

In the '90's and up until today that effort has morphed into an effort to find "carbon neutral" (whatever that means) energy supplies. 

Regardless of your opinion or your scientific understanding, the bottom line is this: in the United States, energy choices are political, with little rhyme, reason or predictability.  Unless you have been sleeping under a rock, you will also recognize we are less than sixteen months from the most political activity on earth--the next political election.  That means we may be less than eighteen months away (20 Jan 2021) from a change in energy policy...or maybe not.

My caution to you as an investor or as an adviser to investors is this: don't get caught up in any company's grand pronouncements about what they are doing to solve their energy problems today. 

For it just may be that their policy will be forced to change in a year and a half.  This policy may change despite energy assets which have a very long amortization period.  Flexibility and minimization of consumption are key when it comes to energy assets.

Have a comment?  Email me at jim.thompson@ipulpmedia.com

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If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

 

Sincerely,

 


Jim Thompson, CEO
Talo Analytic International, Inc.

 

 

 
JRT Banker's Engineer