Transcript of Energy Conference Call on Swiss Life Expanded Coal Exit ‘In Process,’ Asset Manager Tells The Capitol Forum, No Second Request for Chevron/PDC Energy and Most Recent on Vistra/Energy Harbor FERC Docket

Jul 18, 2023

On July 14, The Capitol Forum’s Teddy Downey, Sharon Kelly, and Daniel Sherwood discussed the most pertinent issues impacting energy markets and policy. The full transcript, which has been modified slightly for accuracy, can be found below.

TEDDY DOWNEY:  Good morning and thanks for joining us today for our Energy Conference Call. I’m pleased to be joined by Sharon Kelley and Daniel Sherwood, two of our big three Energy Team members. And we’ve got a lot to cover. So I want to dive right in. I want to remind you, if you have questions, please email them to Or you can do them in this question app thing on GoTo webinar. Daniel, Sharon, thank you so much for doing this today.

DANIEL SHERWOOD:  Thank you for having us. Happy Friday. And Julia is off today having a much earned day off. She’ll be missed. But she’s an integral component of this article that we published on Monday and all of our work here. So, we will dive right in and get everybody else on their well-earned almost days off on the weekend, hopefully, fingers crossed.

So yeah, for starters, Monday morning, we published this Swiss Life and coal piece, which is an extension of our ongoing investigation into ESG’s impact on the market. ESG is continuing to get a lot of buzz. I’ve seen a ton of headlines on it recently in some other business press, which always makes me happy to see our peers focus on an issue that we’ve deemed materially important to our readers.

We got into this file by way of investigating whether actively managed funds had updated their underlying metrics as it relates to FirstEnergy, because we’ve exclusively covered these different screening metrics that were erroneous as it related to FirstEnergy and thus allowed it to be included in both actively managed funds and passive funds. So Sharon got the scoop from Swiss Life. And Sharon, if you want to give us an update on the piece, we’d welcome it.

SHARON KELLY:  What we heard from Swiss Life is that they’re planning to use the Global Coal Exit List for their coal phaseout policies. That really caught our eye because data providers are turning out to be foundational for how ESG actually operates in the real world. How they assess the degree to which a company is involved in, for example, coal, matters enormously in terms of the end consequences for investment portfolios. GCEL is noteworthy because it’s a list that’s produced by a German NGO, Urgewald. They not only review filings from the companies they assess, but they also reach out to environmental NGOs and other organizations to understand a little bit more about each company on the list, what their operations look like, and also what their plans for the future look like.

Ultimately what that means is that the Global Coal  Exit List takes a broader view of coal involvement than Swiss Life has historically, based on Swiss Life’s current portfolio. And what we found in our investigation is that there are dozens of companies that are currently, as of the most recent available data, in Swiss Life portfolios that are also on the Global Coal Exit List. We tallied about $145 million in investments. We would expect that if Swiss Life implements a full divestment based on the Global Coal Exit List, that that those investments will be shed.

DANIEL SHERWOOD:  Yeah, and it sticks out because Swiss Life could pick one of these more narrow screening methods that we’ve explored. But instead, they’re going with a more broad, and in our view, a more consistent with like observable reality. And I don’t I don’t mean that tongue in cheek. An example I bring up often is this this notion of segregating generation from distribution businesses, for instance. And we discussed that in past calls. And if anybody wants to dive deeper, I’m happy to. It’s a relatively nuanced point, but it makes a huge difference in calculating their reliance on coal-fired electrons. Whereas, the GCEL doesn’t have that, in my opinion, artificial segregation.

So that’s just one example of many where it seems to be a more honest assessment of what’s this exposure? And what stuck out to me there was like the number of Japanese conglomerates or the state owned EDF. You know, these are big, big entities that are kind of the backbone of society. I was struck by this fact that they were willing to share this with us when it wasn’t public. And it really demonstrates to me that coal and the high carbon footprint continues to be center of mind for these really important, actively managed funds that obviously have market impacts quite broadly.

TEDDY DOWNEY:  And just to take a quick step back here, so we’ve seen some of these metrics and recommendation data providers basically that are not very legit, that are not consistent with observable reality. That’s kind of like an excuse for ESG, for just naming a dirty production company to be in ESG. So when we look at this Global Coal Exit List, we’re expecting and are the new rules in Europe — I know we’re going to get to this eventually, but the idea here is that as funds are compelled really to shift, and even these data providers have to shift to more legitimately assess ESG compliance, stricter rules, better disclosures. We’ve got the SEC in the U.S. with disclosure recommendations and then Europe with rules. That we’ll be probably seeing more of a gravitation to this more legitimate type of list and more of this activity of divesting these things? Is that a fair way to characterize what we’re going to see going forward? I mean, I know it’s going to be fact specific. Okay. Well, how do these funds determine what they can invest in? And obviously, we’ve got a lot of reporting ahead of us. But just taking a step back and looking at a trend here, we can generally expect to see more of this type of behavior than the sort of excuse that we’ve had. Or is that fair?

DANIEL SHERWOOD:  I don’t know about more or less — and Sharon, feel free to step in here. But I think writ large, this just signals to me that a serious market participant who focuses on returns, who’s one of the utmost professionals in the space, if they wanted to cut corners and still have exposure to coal, you could do that in this environment in a way that would still allow them to claim great ESG accolades, whether it’s legitimate or not, and whether or not The Capital Forum, for instance, wants to pry against that.

What this shows me is that instead, internally, they’re like, no. We want to exit coal. Like, we don’t want to pretend that this has coal and then get that return. That’s how I’m taking it as a more proactive approach. That, to your point, speaks to a growing trend. And it just now the next part of the reporting to come is like who’s going to be the good actor or the bad actor? Who’s going to be the people who engage in this in good – I don’t want to say good faith, but with more rigor. And Sharon, did you have something to say?

SHARON KELLY:  One of the things that’s interesting to me is that a lot of the current EU regulations are about sustainability-focused funds. These are your Article 8 and Article 9 funds, as they’re known in the EU. You see that in particular, French regulators put out this report which we highlighted in our coverage and the report sort of took Swiss Life to task over their vague definitions of how coal involvement is defined. Those Article 8 and Article 9 regulations are specifically about sustainability focused funds. But the policies that Swiss Life has publicly announced about their coal exit, they apply not just to their Article 8 and Article 9 funds, not just their sustainable funds, but to Swiss Life Asset Management writ large.

So you’re seeing this expansion of ESG themes reaching not just into sustainability-focused investments, but really broadly into the full-on entire portfolios of large asset managers. And so you sort of see these ripple effects emerging.

DANIEL SHERWOOD:  And that’s a big deal. And I think with or without having an environmental focus and an energy focus, as we do, one of the things that continues to come up when we discuss ESG with our subscribers is it touches and concerns everything, Pepsi, Coke, a rail line, health care, you name it, cloud services. You can’t generate a business without electricity, for instance. And that’s just for starters. Like, there’s so many other ways, whether it’s community engagement or another factor.

So we’re in this trend now of trying to evaluate these types of things. And I think to see this huge fund drop all of its – to change its investment thesis. Like it’s kind of an interesting time approaching the philosophy behind in these investments. So yeah, I think that’s a great point, Sharon, to differentiate between ESG funds specifically and just funds writ large.

TEDDY DOWNEY:  Yeah, the whole crypto craze where they’re mining crypto and all the energy that gets used for that. I mean, it also kind of reminds me of the cloud computing. I mean, these services that just eat up electricity, it’s going to be kind of hard not to be part of this ESG question going forward. So with that, I’m excited to keep covering that. I find it fascinating.

So let’s go to the Chevron PDC, which I’ll be the first to admit I was extremely surprised, did not get a second request. We wrote about that earlier this week about how mergers three is pretty busy with Ice Black Night and this other deal that we’ve been covering, EQT Tug Hill. One thing I wanted to talk to you guys about is this kind of rule of thumb in antitrust on energy, or at least kind of I would say the thing that gets obvious scrutiny is the midstream assets. That’s one of the things we’ve heard and that upstream, it’s like, oh, well, it’s oil and it’s a global price. Maybe not look at it as a regional market.

But I want to talk about, like again, all the ways in this how this deal kind of was regional and actually did involve a midstream component. And just to kind of highlight exactly why it was so surprising. Because even if you take it like, oh, well, at a high level, it looked like an upstream, you know, it looked like a production play. But there was a lot of — actually, Chevron owned the pipeline. So just wanted to talk about that quickly, Daniel.

DANIEL SHERWOOD:  Yeah, I think the messaging around this deal from Chevron and PDC, Chevron really took the lead on kind of the public facing aspects of this deal. I think that the messaging was quite savvy and Chevron emphasized that exactly what you just said. Teddy. This is an upstream deal. Oil’s fungible. People love saying that. And I think for quite some time ‑‑ and I invite, and in seriousness, I really want to speak with the most preeminent upstream oil and gas antitrust attorneys. Because I want to hear, I mean, so much of the antitrust history was born from the upstream oil and gas sector, in my view, in my energy‑oriented view.

But I view Standard Oil as a central character in in that era of antitrust law. And for the last few decades, it’s been a relatively true notion that those upstream deals do kind of pass with little scrutiny. There’s always exceptions and there are to that statement. But generally speaking, that’s the case.

For the last two years, we’ve been kind of laying out, in our kind of Hansel and Gretel way, how you can kind of look at the upstream sector in a different fashion. I think something that was exciting to see from an observer’s perspective of the application of antitrust law in the upstream sector was that EP Energy deal in Utah, in which Utah is a very, very regional small — it’s not an important, I’d say, from a net volume perspective market. And it was a deal that touched those upstream assets and then had a pipeline that supplied the oil. The oil that comes out of that Utah area is unique compared to other oils in most U.S. shale plays. It’s really waxy. It’s difficult to transport.

And we reported about this in the time the FTC wanted to separate that pipe from that deal. And in my mind, that demonstrated that these different pockets of upstream oil and gas production regions have characteristics unique to themselves.

So here in the Denver‑Julesburg Basin, that’s a basin that I’ve always watched really closely because it reminds me of our favorite basin, the Appalachian Basin. Because they have competitive advantages to the kind of prominent oil producing region like the Permian, but then they have differences. In the case of Appalachian, it’s a natural gas focused basin. In the case of Denver‑Julesburg, it’s an oil focused basin that’s obviously closer to the export markets.

And so, when I talk about this with people, dissidents or otherwise, and I say, look. There’s an index that specifically refers to the prices of Denver oil. There’s a refinery there, Teddy. We highlighted that in our conference call. There’s local demand, foreign demand, yada, yada, yada. Production there influences the price. By those reasons, I consider that a market unto itself.

And then people say, well, by that reasoning, every regional market would be a market unto itself. And I’m like, yeah. So I think that’s kind of my approach as to laying out the market. And that’s all we did with the Chevron case. You know, we demonstrated that they were going to increase their market share in the upstream production of Denver‑Julesburg. And then upon further exploration, shone some light on the messaging, which is this is upstream only. And it’s like, well, no. Chevron’s a huge company with midstream assets specifically in this region, which would specifically impact their ability to produce when they buy PDC. So, which all of that’s objectively the case. And the fact that the FTC didn’t issue a second request is obviously another development in that and that’s where we are now.

TEDDY DOWNEY:  Yeah. I mean, would say my biggest takeaway from this is I just don’t see any way that this wouldn’t have gotten a second request if this deal had happened when the new HSR forms were out. Because there’s just no way ‑‑ the onus isn’t on the staff to have done a quick due diligence to figure out that Chevron owned a pipeline which would have put it much more in one of these other buckets, like a red flag bucket. I mean, obviously, we did a conference call. And ostensibly, people from the FTC would have been on that. But at that point, it might have been too late.

So it’s not like they didn’t know at all. But they would have known earlier when the HSR form had been filed. There’s just no way that this type of thing would have slipped through the cracks because every deal is going to have to have that deeper level of disclosure. And so as a result, there’s no confusion around like what is this deal really about? Because you have to be more explicit in the filing and it requires less sleuthing, right?

DANIEL SHERWOOD:  That’s right.

TEDDY DOWNEY:  And now it’s like a little bit of luck of the draw. Did you get a good slewther to look at your deal or not? Like, our former colleague, Nate Soderstrom, you wouldn’t want him poking around your deal. But how many deals are those types of people going to be poking around into? So, the HSR form sort of obviates that sort of luck of the draw situation.

DANIEL SHERWOOD:  Specifically to the point that the guidance says, like contracts ‑‑ I wish I had it in front of me so I could quote it directly, but something to the effect that you would need to disclose the contract rate with your midstream clients. And this parallel wasn’t necessarily the most popular in the discussions surrounding this deal. But I’ll try it again here and then maybe we can move on, unless obviously anybody has anything else to say about it.

The Infineum/Entegris deal, I think, is another good parallel. It’s a different part of the of the industry. It’s a chemicals deal that by business press was characterized as a midstream deal. But no, it’s a chemicals deal that influences the midstream sector. So it touches and concerns the midstream industry, indeed. But it’s not technically a pipe deal. But there, a JV between Shell and Exxon, if my memory serves. That’s right, Sharon? And was going to buy this drag reduction agents company. And it was a small dollar value deal. It’s a small component of these guys’ businesses. But the entities walked away after a little bit of resistance from the agency. And what our sources kind of told us was that the super majors were just kind of like, yeah, we don’t really want to — we’d rather just not answer some of these questions and not finish this deal.

And so I feel like in this instance, a similar, I would imagine, to your point about further disclosures, that the Entegris deal was so small and specific that it didn’t take a lot of sleuthing. It’s just like, wait, hold on. What product? It’s kind of like the generic stuff here. With Chevron, it’s like there’s all sorts of things to sort through. It didn’t take us too much time, but it took us some time to identify every major pipeline that that left Denver‑Julesburg to go to Cushing. And it took us a little bit of time to discover that Chevron has exposure through an interest of a super important gathering system that communicates to all four of those pipelines.

And I wouldn’t expect the FTC to have that information readily at their fingertips. But I do think that that’s the type of information, to your point, that would put it in the red flag bucket. And that’s a large purpose of the second request. It gives the agency the opportunity to say, hey, like, what kind of insight do you have into the oil barrels leaving the market that aren’t even going through a pipe you own due to your gathering system, for instance? So just, yeah, I mean, you know, that’s our job is to raise those types of questions and we’ll continue to do that.

TEDDY DOWNEY:  Yeah, the last thing I’ll say about the HSR form, look, they’re going to control 25 percent of the production out of a basin. And I think that raises some interesting labor issues. You know, 20 percent, 30 percent. Those are the kind of thresholds where you start seeing some monopsony power when it comes to labor. I mean, there’s stuff on that in the HSR form too. That would be interesting to kind of poke around on like any issues with OSHA and stuff like that that’s in the HSR form that is sort of like indicative of what kind of treatment toward labor these companies have.

Again, not to beat the issue to death, but these are all things that would have been more explicit post‑HSR form. I think it’s very consistent with the goals of leadership. But deals slip through the cracks. There’s limited resources. So we’ll keep our eye out. And that brings us to this next deal, this Energy Harbor. I would love to hear what you’re looking at on that one and the FERC docket and how that’s going.

DANIEL SHERWOOD:  Take it away, Sharon. Thank you, Teddy.

SHARON KELLY:  Absolutely. So, it’s a fascinating case for a lot of reasons. So this is an acquisition by Vistra of Energy Harbor’s nuclear and retail businesses. It’s a $3 billion cash, plus a 15 percent interest deal. And since we’ve been following FirstEnergy, it’s worth pointing out that Energy Harbor is a company that emerged out of a Chapter 11 bankruptcy in March of 2020 from the FirstEnergy subsidiary FirstEnergy Solutions.

So these are nuclear power plants that were formerly FirstEnergy’s nuclear power plants. They’re being sold to Vistra, which currently operates a nuclear power plant down in Texas. In earnings calls, Vistra has said that they expect the deal to be finalized by the end of this year. Before that happens, they have to get approval from the Department of Justice, the Nuclear Regulatory Commission, and from FERC.

So there’s three proceedings here. In a FERC filing just this week, Vistra and Energy Harbor told FERC that they expect regulatory approvals from the NRC by October 1st, and they requested that FERC make a decision in their favor by October 1st as well. They’ve disclosed publicly that they have made their Hart‑Scott‑Rodino filings with the DOJ, but no word in securities filings yet on whether there’s been a second request. This is a deal that was announced back in March. So we’re looking at sort of like a three part regulatory review underway at the moment.

TEDDY DOWNEY:  Any glaring issues just outside of the filings that you see?

SHARON KELLY: So in the FERC proceedings, antitrust issues have come up in filings by two Ohio regulatory agencies and also the PJM’s Independent Market Monitor. So FERC reviews certain mergers concurrently with the traditional antitrust review by FTC or DOJ. FERC reviews those mergers for their effects on competition, rates and regulation and FERC will approve deals that it considers to be consistent with the public interest.

It’s a power that FERC has exercised recently. In April, American Electric Power and Liberty Utilities abandoned a multibillion-dollar deal related to Kentucky transmission assets, which was rejected by FERC following protests from PJM, Kentucky state regulators and other parties in December. And so, here, we’re looking at objections that have been filed by PJM and Ohio state authorities to this deal and they’re pretty illuminating. The state officials warn of potentially large impacts to power prices and supply in Ohio specifically that could result from this deal.

DANIEL SHERWOOD:  It’s the second and fourth largest retail nuclear generator providers in the country, Energy Harbor and Vistra, respectively. They’re being reviewed by FERC, which most recently has taken an action on a transmission level asset in the same grid. AEP is a competitor of Energy Harbor. And they’re hoping for an October ruling.

And so, I also want to make sure we hit the NRC docket and what they have to review there. But I think that’s a separate issue. And I think most germane to our readers is the competition issues that kind of grabbed you, that I took as the ability to possibly manipulate the market, which has happened in the past; this kind of onsite generator demand notion and possible issues with ownership.

SHARON KELLY:  Thank you. Yeah, that was a perfect setup. So I took a good look at the filings from PJM in particular. Because PJM’s Independent Market Monitor, their filings are a little different. They don’t oppose the deal — as long as there are certain technical conditions that are applied to it. The brief filed by the Office of the Ohio Consumers’ Council and the Northeast Ohio Public Energy Council both make the point that this deal is going to increase market.

PJM’s independent market monitor says yes. But market power is “endemic” here already, their wording. And because of that, we have certain regulatory restrictions that we put into place. We recommend four more restrictions before this deal is approved. And the concerns that they’re designed to address are the ones that you just flagged, Daniel.

So there’s a really interesting dynamic here. Because if I’m a power consumer, to me, a watt is a watt. Like a megawatt is a megawatt, whether it’s from nuclear or solar or natural gas. But when it comes to pricing, how that power is generated becomes is actually really relevant because each kind of power plant has characteristics that impact their ability to deliver a watt at a given moment — and, in any power grid, timing is vital.

And so PJM points out that nuclear power plants, they’re basically always running. These are your baseload power generation plants. And in PJM in 2022, nuclear power plants were up and running 94.6 percent of the time. These are always-on assets — whether prices are high or low, they are consistently generating power.

And what happens is, when you bring nuclear power assets under the umbrella of a company like Vistra, which also has coal and natural gas operations in PJM, you get a big change in market incentives.

PJM says that nuclear power plants haven’t historically been used to operate to exercise market power by withholding supply. And that’s basically because your nuclear power plants are very difficult to turn on and off. But coal, natural gas, they’re much more dispatchable. They’re much more easy to sort of dial on and dial off. And if the same company that has the capacity to do that also has this always-on source of power from its nuclear plants, you get this like change of incentives — because if a company was to drive prices up by withholding, say, natural gas power from the grid, it could now benefit because its steady supply of nuclear power would be delivered at higher prices.

So PJM says this will “increase the incentive for Vistra to exercise its market power to increase prices above the competitive level because their nuclear units will benefit directly and significantly.” So that’s sort of the premise there. That’s one of their big concerns about potential market manipulation.

DANIEL SHERWOOD:  The same asset studies that are central, that are the main characters in the scandal in Ohio, and thee recent conviction of Larry Householder. And so it’s like these assets are central to the acquisition because they’re lucrative, in large part due to regulatory regimes that were constructed under knowingly fraudulent or due to bribery and such. And so it just kind of begs an interesting question, where if you have this incentive of, yeah, it’s always on. It’s fascinating. And for people who study the grid, this isn’t necessarily a first of its kind issue. So I think that’s something that makes us want to look at this in greater detail.

TEDDY DOWNEY:  When it comes to the remedies that PJM envisions, it does seem like power grids, because there are a lot of monopolies that they’re dealing with a lot, there can be — I don’t want to say they’re more legitimate, but it’s more typical to see behavioral remedies and regulations. Obviously, FERC is a monopoly regulator, effectively. So are the remedies that PJM envisions, you know, it doesn’t seem like that is actually an easy thing to regulate though. Because it’s kind of the discretion of the company on when they want to withhold the power. It’s not like, oh, you’re going to run the gas at 90 percent. How are they going to regulate that effectively? What was your take on the proposed remedies that PJM was suggesting?

SHARON KELLY:  So I feel like you’re almost channeling the voice of the Office of the Ohio Consumer Council. So PJM does propose these sort of these pretty highly technical remedies that limit the combined company, Vistra Vision, that would limit their ability to basically profit by using any of the market power that they would gain. The Office of the Ohio Consumers Council, which is a state agency, they say PJM’s proposed remedies, they’re flawed and they’re insufficient, and FERC, you need to do something that’s a little bit more significant than just sort of put some curbs and some sort of outer boundaries on the pricing mechanisms here. So yes, I think there’s significant dispute there.

DANIEL SHERWOOD:  Yeah, there’s call for more. How I heard that is there’s call for more. I mean, this is the interesting thing about these RTOs and ISOs, these Regulated Transmission Organizations, as PJM is an interconnection. You know, it’s a kind of a unique area of this world where they try to play fair. And they’re dealing with literally millions of customers and hundreds of gigawatts of generation. And it’s a complicated process.

And one of the very few stories, Teddy, that I was ever able to publish under your tutelage was our study on the minimum offer price rule, which I’m not sure if it applies to PJM. We looked at it in the NE ISO context. But I think what it sounds to me is that PJM is willing to tweak little aspects of their different equations, whether it’s on the auction side, on the wholesale. There’s a lot of different levers they can pull. And I think what it seems to me is that kind of the monitor and the entities that have the consumer at their directive are saying this is insufficient. So I don’t know if that means no merger at all is the appropriate remedy. And I don’t know if they’ve gotten there. Sharon, have they? Or has it not gotten to that level of the proceeding?

SHARON KELLY:  So I think one of the primary requests that’s pending right now is for FERC actually to hold a hearing on these issues, because there’s a lot of other layers to this. We’re only just barely sort of like scratching the surface here.

One of the interesting elements just to mention in passing is there’s also an issue of data centers that are being located behind the generator load, behind the generation interconnect. And so, as you see companies ‑‑ like this one particular Energy Harbor deal that was previously announced relates to a blockchain company. So you see sort of these unconventional users who are co-locating at energy plants and effectively interacting with generators in a way that can put supply outside of the reach of a regional market, like PJM. And these are issues that FERC is going to have to confront not just in this deal but potentially in others as the energy transition continues and the energy market shifts.

One of the remedies that PJM proposes relates directly to these data centers. Two relate to how pricing and offers will be conducted, this is where it gets pretty technical. And then one is about how the combined company, Vistra Vision, will behave during weather alerts and sort of non‑typical conditions, times when the grid is under stress basically, where you might see the most vulnerability of price to potential market manipulation.

DANIEL SHERWOOD:  And I’m pretty sure, if my memory serves, that Vistra was definitely on the hook for some of the issues around ERCOT and the storm Elliot in Texas. And so, there’s a lot to unpack. And there’s a question about ownership. And Sharon’s kind of found some noise there where Vistra says X here and Y here. So, from my understanding, is these utility deals can really drag on for quite some time. And so I don’t know. I’m not ready to make that call yet. But hopefully, we can do some more reporting. And right now we wanted to just bring it up and get on the timeline of they’re asking for October because that’s new.

TEDDY DOWNEY:  Yeah, and I also wonder how DOJ’s involvement affects these remedy conversations. Because DOJ is adamantly against these types of behavioral remedies if there’s a real market power issue. I would imagine that’s probably not quite as staunch of a position in a FERC regulated market. And I just generally wonder how much DOJ is involved, just given that FERC — you know, how much DOJ takes the lead, I’m not super, you know, we haven’t done a ton of FERC type of deals. So it would be interesting just to see if this DOJ versus prior DOJs is more involved, same involved, how deferential they are to FERC. All of that seems interesting.

So I’m excited to keep looking at that. And like how the laws that were put in place under a bribery scheme are viewed in the course of a regulatory proceeding just seems just like an almost Orwellian kind of thing. Like, wait. So this law is the thing that’s going to protect us? How does this law fit in, the one that the bribe was used for? So anyway, it just sounds fun to cover. I’m excited to read more about that. And unless we have anything else. Daniel, Sharon, anything else before we let our listeners go for the weekend?

DANIEL SHERWOOD:  I don’t see any questions in the forum. We did get a lot of traffic this week on Mountain Valley. I can hit that in 90 seconds and then we can wrap.

TEDDY DOWNEY:  Yes, give us the 90 seconds on Mountain Valley Pipeline.

DANIEL SHERWOOD:  Oh, Mountain Valley Pipeline. So, yes, despite this extraordinary act of Congress, the Fourth Circuit brazenly said, no, we are requesting a stay on the construction as we evaluate some of the petitions here. And so the respondents, Equitrans and the like, are incensed, are considering an appeal to the Supreme Court level.

The lawyer in me still wonders about this whole venue question. In my mind, the appropriate place for venue would have been the D.C. Circuit. Of course, the respondents’ attorneys have argued that, to no avail at this moment. Not to do a victory lap or anything, but this is consistent with our guidance on this issue, is that despite being surprised by how Mountain Valley Pipeline got basically every single thing it could have ever dreamed for in the bill, regardless of any legal movement, I was skeptical that they could finish construction this year. But we also flagged the high likelihood of challenge and that it could impact the timeline.

Zooming out one layer deeper, based on our research and interviewing a few experts, including administrative law judges, there does appear to be precedent to do what Congress did here, despite the kind of general notion of what about the separation of powers? You know, Congress has a lot of power. Congress created a lot of the administrative law regime that gives these agencies power. I’m simplifying things, but for the most part, that’s basically where the precedent sat.

So I don’t think that the petitioners will eventually win. But if the incentive there was to delay in the short term, in that regard, they certainly won. So, yeah. So now we’re back to kind of square one for the ninth time. Permits are pending. Construction is paused. And we will see. So right now on the actual pipeline route, there’s remediation that’s allowed to be taking place. Some people have been alleging that that has gone beyond remediation. We are not wading into those waters. I would be skeptical of that allegation, but it could be obviously the case. There’s a lot of monitors down there, a lot of drones, a lot of people tuned in.

And, fortunately or unfortunately, for Mountain Valley Pipeline, they are no stranger to navigating these different legal systems just due to the years and years and years of challenges. So they could get some swift hearing. But even then, each week that goes by and you don’t have a bulldozer trying to figure out how to get to the top of the mountain so it can lay the pipe is one week less that they can feasibly complete this thing in this year.

TEDDY DOWNEY:  Okay, great. Well, I think we covered a lot of ground, as always. Thank you so much, Daniel and Sharon. And thanks to everyone for joining the call this week. Have a good weekend, everybody. And this concludes the call. Bye‑bye.