I don’t really have a good sense for who won the debate last night, but one thing is clear: America lost. I remember in junior high when I was a part of debate club and not surprisingly, it was amongst my favorite activities. I always loved being able to pick apart my opponents arguments with logic and wit and come in with the winning one. But to do that… you have to listen. I didn’t see a lot of that last night. Politics should be about making an argument, morphing the position and the entire country getting a win. I hope we get there, but I’m not hopeful.

In the meantime, we had two big developments in oil and gas land worth chatting about. The first, Oasis filed for bankruptcy in one of the least surprising filings of the year. OK, that’s not true. None of Whiting, Unit, Cheasapeake or Extraction were remotely surprising, but for Oasis, as we talked about in #technicaltuesday in February, their debt was always going to be a problem (as it will be for America when the debt comes due, but that’s a discussion for another day). With a fresh balance sheet, Oasis will emerge having wiped out billions of dollars of debt and equity value, but the real read through is to OMP (Oasis midstream partners) who is down 25% on the news. Bankruptcy is really bad for midstream providers, and the banker led Midstream spin outs will come home to roost, it’s only a matter of time. First, for oil, where pipes were overbuilt for a growth plan that was never possible and now, they aren’t full making pipeline integrity an issue. Second, for gas, as take or pay volumes continue to increase without matching actual volumes, the squeeze on Appalachian players will be real unless we have a sustained $2.75/mcf price environment.

The bigger news of the week, at least as Colorado is concerned, is that the reformed COGCC surprised no one when they expanded setbacks in their preliminary unanimous approval to 2000’, effectively matching the 2500’ setbacks on defeated prop 112, and further showing that when Governor Polis said “let SB-181 work” what he really meant was “STFU so I can shut development down without a fight”. How many minerals will be inaccessible, what lawsuits may come from oil and gas companies as a result of the violation of access to their minerals and how it will impact Colorado will take years to watch unfold, but it certainly sends a negative message to oil and gas companies who are headquartered here and do so much for the community. If they have no benefit, why bother, and my reading of the tea leaves says this was the final straw and I’d expect Oxy to close their office. Horrible for employees, the city of Denver and Weld county, and people have no one to blame but the Governor himself. These are bad policies and it’s a shame there isn’t more open and honest debate about it.

On the upcoming podcasts with Mark Mills and Chris Wright, we talk a lot about energy policy and in my opinion, they are worth the listen.

#hottakeoftheday