December 11, 2021

The Oil Blues

World Economy Entering Period Of Oil Scarcity, Halliburton CEO Says

by Tyler DurdenFriday, Dec 10, 2021 – 07:00 PM

Authored by Nicholas Dolinger via The Epoch Times,

Halliburton CEO and president Jeff Miller made waves this week by predicting that the world is due for a period of oil scarcity in comments at the World Petroleum Congress in Houston, Texas.

“I think that for the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” Miller said.

Since 2014, the oil industry has generally deemphasized building new infrastructure in the face of low prices. However, that trend may now catch up with the industry, which now finds demand for oil exceeding the available supply given current infrastructure.

Some analysts have speculated that it is increasingly likely that oil prices will soon climb to $100 per barrel, a price unseen in the past seven years and which has serious potential to disrupt the economy.

An additional factor contributing to predicted oil scarcity is a labor shortage in the fossil fuel industry surpassing that in the general economy.

The widespread perception that fossil fuels will be marginalized in the future of energy and transportation makes long-term careers in petroleum unattractive to young workers, with many oil workers seeking to switch to renewables or leave the energy industry outright.

A recent survey revealed that 43 percent of oil industry employees sought to transition to other sectors in the next five years, as reported by Reuters.

As baby boomer employees retire, the industry struggles to replace them with young workers, who see the oil industry as unfavorable to long-term careers because of concerns about climate change models, and pressure by politicians, environmentalists, and investors to transition to renewable energy sources.

This combination of infrastructural underinvestment and labor shortages is likely to result in an oil supply stretched thin to meet demand, resulting in higher prices and possible shortages.

With oil extraction occurring at a significant time lag from industry investment and the skill shortage in the labor industry showing no signs of abating, there are major reasons to believe that any scarcity in oil supplies could last long into the future.

https://www.zerohedge.com/energy/world-economy-entering-period-oil-scarcity-halliburton-ceo-says

December 11, 2021

The Oil Blues

World Economy Entering Period Of Oil Scarcity, Halliburton CEO Says

by Tyler DurdenFriday, Dec 10, 2021 – 07:00 PM

Authored by Nicholas Dolinger via The Epoch Times,

Halliburton CEO and president Jeff Miller made waves this week by predicting that the world is due for a period of oil scarcity in comments at the World Petroleum Congress in Houston, Texas.

“I think that for the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer,” Miller said.

Since 2014, the oil industry has generally deemphasized building new infrastructure in the face of low prices. However, that trend may now catch up with the industry, which now finds demand for oil exceeding the available supply given current infrastructure.

Some analysts have speculated that it is increasingly likely that oil prices will soon climb to $100 per barrel, a price unseen in the past seven years and which has serious potential to disrupt the economy.

An additional factor contributing to predicted oil scarcity is a labor shortage in the fossil fuel industry surpassing that in the general economy.

The widespread perception that fossil fuels will be marginalized in the future of energy and transportation makes long-term careers in petroleum unattractive to young workers, with many oil workers seeking to switch to renewables or leave the energy industry outright.

A recent survey revealed that 43 percent of oil industry employees sought to transition to other sectors in the next five years, as reported by Reuters.

As baby boomer employees retire, the industry struggles to replace them with young workers, who see the oil industry as unfavorable to long-term careers because of concerns about climate change models, and pressure by politicians, environmentalists, and investors to transition to renewable energy sources.

This combination of infrastructural underinvestment and labor shortages is likely to result in an oil supply stretched thin to meet demand, resulting in higher prices and possible shortages.

With oil extraction occurring at a significant time lag from industry investment and the skill shortage in the labor industry showing no signs of abating, there are major reasons to believe that any scarcity in oil supplies could last long into the future.

https://www.zerohedge.com/energy/world-economy-entering-period-oil-scarcity-halliburton-ceo-says

December 10, 2021

More On Recent Acquisition by Saint-Gobain

GCP to help Saint-Gobain target construction sustainability

Al Greenwood

09-Dec-2021

HOUSTON (ICIS)–Saint-Gobain expects its pending $2.3bn acquisition of GCP Applied Technologies will help it capitalise on rising demand for construction materials that can make homes and buildings more energy efficient and sustainable, an executive said.

The boards of both companies approved the deal, and Saint-Gobain expects to close on the acquisition at the end of 2022.

The GCP acquisition falls in line with Saint-Gobain’s focus on light construction and sustainability, the subject of its investor-day presentation in October, said Mark Rayfield, CEO of Saint-Gobain North America. He made his comments in an interview with ICIS.

GCP makes concrete admixtures and cement additives, and these can lower the carbon emissions produced from making concrete.

Concrete produces a lot of carbon dioxide (CO2), accounting for about 8% of the world’s emissions of carbon, according to Chatham House, a UK-based think tank.

“By adding additives and admixtures to cement construction in both infrastructure and commercial construction, you’re decarbonising that industry significantly and driving towards a more sustainable building practice,” Rayfield said. He estimates that these products can reduce the carbon intensity by a third or even higher versus traditional concrete.

Saint-Gobain already produces concrete admixtures and cement additives through its Chryso business, which it acquired earlier this year for €1.02bn. Much of Chryso’s footprint is in Europe and the Middle East. GCP complements this with its larger presence in North America, Asia-Pacific and Latin America.

“This is really building a significant global leader in this type of construction-chemical business across Saint-Gobain,” Rayfield said.

GCP also makes products used in fire protection, roofing underlayments and building envelopes. These products prevent air leakage, water damage and fire.

Saint-Gobain already makes these products, but the GCP acquisition will give the company a larger selection to meet the evolving needs of the construction industry.

The construction industry accounts for 40% of global emissions of carbon dioxide (CO2), and 120 countries have committed to carbon neutrality, Saint-Gobain said during its recent investor day.

To achieve those carbon-neutrality goals, policy makers will impose stricter energy-efficiency standards for buildings. On top of that, some companies are adopting their own energy-efficiency goals independent of government, and these targets could filter down to any buildings they renovate or construct.

Energy efficiency will put new demands on the performance of buildings. To meet those demands, companies will approach building design from a standpoint of systems and not from one of individual products.

“The world you and I grew up in was product, product product,” Rayfield said. “The world we are going into is systems and solutions.”

The GCP acquisition will help Saint-Gobain provide these companies with such systems, be it roofs or facades. The systems will make homes and buildings consume less energy, last longer and feel more comfortable.

CONSTRUCTION OUTLOOK
For residential construction, the US is at a good level of activity, Rayfield said.

However, it has not returned to the highs it reached before the financial crisis of 2007-2008. The following chart shows new housing starts in the US. Figures are in thousands of units and they are not seasonally adjusted.

Source: US Census Bureau

In the years following the financial crisis, the US construction industry has not built enough houses to keep up with the country’s demographics. Based on the rate of family creation, Rayfield estimates that the construction industry underbuilt by 4m houses.

The rate of housing construction is still good, but it is being moderated by supply-chain constraints, labour shortages and limited availability of land, he said.

For nonresidential construction, spending has surpassed its highs from the time of the financial crisis. However, it is still below pre-pandemic highs, as shown in the following table. Figures are in millions of dollars and are not seasonally adjusted.

Source: US Census Bureau

Nonetheless, Rayfield noted signs of recovery. “We’ve seen a lot nonresidenial construction in warehousing and those types of spaces that support the order-from-home type of environment,” he said.

At the same time, companies are renovating revamping offices so they can accommodate post-pandemic work habits.

“You’ll see the market in different areas go at different speeds, but I think it is starting to recover now,” Rayfield said.

That recovery should receive a boost from this year’s $1tr infrastructure package.

Construction uses several coatings, adhesives, sealants and elastomers (CASE), which are important chemical end markets.

The white pigment titanium dioxide (TiO2) is used in paints.

For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.

High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Insight by Al Greenwood

www.icis.com/explore/resources/news/2021/12/09/10714521/insight-gcp-to-help-saint-gobain-target-construction-sustainability/

December 10, 2021

More On Recent Acquisition by Saint-Gobain

GCP to help Saint-Gobain target construction sustainability

Al Greenwood

09-Dec-2021

HOUSTON (ICIS)–Saint-Gobain expects its pending $2.3bn acquisition of GCP Applied Technologies will help it capitalise on rising demand for construction materials that can make homes and buildings more energy efficient and sustainable, an executive said.

The boards of both companies approved the deal, and Saint-Gobain expects to close on the acquisition at the end of 2022.

The GCP acquisition falls in line with Saint-Gobain’s focus on light construction and sustainability, the subject of its investor-day presentation in October, said Mark Rayfield, CEO of Saint-Gobain North America. He made his comments in an interview with ICIS.

GCP makes concrete admixtures and cement additives, and these can lower the carbon emissions produced from making concrete.

Concrete produces a lot of carbon dioxide (CO2), accounting for about 8% of the world’s emissions of carbon, according to Chatham House, a UK-based think tank.

“By adding additives and admixtures to cement construction in both infrastructure and commercial construction, you’re decarbonising that industry significantly and driving towards a more sustainable building practice,” Rayfield said. He estimates that these products can reduce the carbon intensity by a third or even higher versus traditional concrete.

Saint-Gobain already produces concrete admixtures and cement additives through its Chryso business, which it acquired earlier this year for €1.02bn. Much of Chryso’s footprint is in Europe and the Middle East. GCP complements this with its larger presence in North America, Asia-Pacific and Latin America.

“This is really building a significant global leader in this type of construction-chemical business across Saint-Gobain,” Rayfield said.

GCP also makes products used in fire protection, roofing underlayments and building envelopes. These products prevent air leakage, water damage and fire.

Saint-Gobain already makes these products, but the GCP acquisition will give the company a larger selection to meet the evolving needs of the construction industry.

The construction industry accounts for 40% of global emissions of carbon dioxide (CO2), and 120 countries have committed to carbon neutrality, Saint-Gobain said during its recent investor day.

To achieve those carbon-neutrality goals, policy makers will impose stricter energy-efficiency standards for buildings. On top of that, some companies are adopting their own energy-efficiency goals independent of government, and these targets could filter down to any buildings they renovate or construct.

Energy efficiency will put new demands on the performance of buildings. To meet those demands, companies will approach building design from a standpoint of systems and not from one of individual products.

“The world you and I grew up in was product, product product,” Rayfield said. “The world we are going into is systems and solutions.”

The GCP acquisition will help Saint-Gobain provide these companies with such systems, be it roofs or facades. The systems will make homes and buildings consume less energy, last longer and feel more comfortable.

CONSTRUCTION OUTLOOK
For residential construction, the US is at a good level of activity, Rayfield said.

However, it has not returned to the highs it reached before the financial crisis of 2007-2008. The following chart shows new housing starts in the US. Figures are in thousands of units and they are not seasonally adjusted.

Source: US Census Bureau

In the years following the financial crisis, the US construction industry has not built enough houses to keep up with the country’s demographics. Based on the rate of family creation, Rayfield estimates that the construction industry underbuilt by 4m houses.

The rate of housing construction is still good, but it is being moderated by supply-chain constraints, labour shortages and limited availability of land, he said.

For nonresidential construction, spending has surpassed its highs from the time of the financial crisis. However, it is still below pre-pandemic highs, as shown in the following table. Figures are in millions of dollars and are not seasonally adjusted.

Source: US Census Bureau

Nonetheless, Rayfield noted signs of recovery. “We’ve seen a lot nonresidenial construction in warehousing and those types of spaces that support the order-from-home type of environment,” he said.

At the same time, companies are renovating revamping offices so they can accommodate post-pandemic work habits.

“You’ll see the market in different areas go at different speeds, but I think it is starting to recover now,” Rayfield said.

That recovery should receive a boost from this year’s $1tr infrastructure package.

Construction uses several coatings, adhesives, sealants and elastomers (CASE), which are important chemical end markets.

The white pigment titanium dioxide (TiO2) is used in paints.

For polymers, expandable polystyrene (EPS) and polyurethane (PUR) foam are used in insulation.

Polyurethanes are made of methylene diphenyl diisocycanate (MDI), toluene diisocyanate (TDI) and polyols.

High density polyethylene (HDPE) is used in pipe. Polyvinyl chloride (PVC) is used to make cladding, window frames, wires and cables, flooring and roofing membranes.

Insight by Al Greenwood

www.icis.com/explore/resources/news/2021/12/09/10714521/insight-gcp-to-help-saint-gobain-target-construction-sustainability/

December 10, 2021

Another Arsenal Acquisition

Arsenal’s APPLIED Adhesives Acquires Bird Song Adhesives, Inc.

MINNETONKA, Minn., December 9, 2021– APPLIED Adhesives, a premier custom adhesive solutions provider in North America, today announced that it has completed its acquisition of Bird Song Adhesives, Inc., a regional supplier of specialty adhesives located in Madison, Tennessee. This acquisition strengthens APPLIED’s commitment to providing industry leading products, technical expertise, and exceptional service to its customers. “Bird Song Adhesives’ longstanding commitment to their customers has enabled them to build an impressive business with a very loyal customer base,” said John Feriancek, President and CEO of APPLIED Adhesives. “We are thrilled to welcome Bird Song Adhesives to the APPLIED team and look forward to continuing to provide their customers with an outstanding customer experience.” Bird Song Adhesives’ and APPLIED Adhesives share a passion for delivering a superior customer experience that is centered on understanding their customer’s manufacturing and production processes and providing adhesive solutions crafted to meet the specific needs of each customer. “Since 1991, our goal has been to provide our customers with quality goods, excellent service, and a fulfilling experience. We knew if we did those things, the benefits would return to us, and they have. The success we have realized has been a blessing to both us and our customers,” said Greg Rogers, Co-Owner of Bird Song Adhesives, Inc. “It is with excitement that we join the Applied team and are confident our core values will only be enhanced, providing our customers more than ever.” Bird Song Adhesives, Inc. is APPLIED Adhesives’ fifth acquisition in 2021.   About Bird Song Adhesives, Inc. Located in Madison, Tennessee, Bird Song Adhesives, Inc. is a regional supplier with over 30 years of providing quality products and service to their customers. Their philosophy is to treat each customer with the respect and provide the attention they deserve, simple, but one that has proven successful.   About APPLIED Adhesives APPLIED Adhesives, founded in 1971, is a premier custom adhesive solutions provider in North America. The company is a value-added distributor of hot melt, water-based, and reactive adhesives as well as dispensing equipment. APPLIED Adhesives serves as a critical supply chain partner to leading adhesive manufacturers and formulators by offering reach and high service levels to an expansive customer base. For more information, please visit www.appliedadhesives.com. About Arsenal Capital Partners Arsenal is a leading private equity firm that specializes in investments in middle-market industrials and healthcare companies. Since its inception in 2000, Arsenal has raised institutional equity investment funds of more than $7.0 billion, completed more than 200 platform and add-on investments, and achieved more than 30 realizations. The firm works with management teams to build strategically important companies with leading market positions, high growth, and high value–add. For more information, please visit www.arsenalcapital.com.

Is potential tax reform a driver?