Also in today’s newsletter, the hottest themes in the shale patch

Hello and welcome back to Energy Source.

Don’t miss our piece from London on a budding dispute between the oil boss running the UN’s climate conference this year, and environment ministers.

Oil prices have fallen hard this week as fears around the economic outlook grow. Derek has more on that below.

Myles talks to Oliver Stone, the iconic and controversial director, about his new film on nuclear power. And we chatted with Ben Dell and Mark Viviano of the influential investment firm Kimmeridge to ask where they’re putting their bets and the future of shale.

Thanks for reading. — Justin

Oliver Stone: ‘It’s time to look again at nuclear’

The conspiracy behind the Kennedy assassination. The Vietnam war. Jim Morrison. The virtue of greed. What a great guy Vladimir Putin is.

Film-maker Oliver Stone has an eclectic roster of interests and opinions. The latest is nuclear power.

Stone’s newest documentary Nuclear Now is a paean to atomic energy, which he argues, is the only viable solution to tackling emissions and stemming climate change.

“We’ve run out of time to be afraid,” Stone declares at the outset of the film. “It’s time to look again at a proven form of energy. It’s time to look again at nuclear. Because this incredible power — the very thing that we fear — is what may save us.”

Stone’s basic premise is that nuclear has historically received a bum rap, falling victim to “misinformation” and unfair associations with corporate America, nuclear war and the prospect of meltdowns.

“I was never an activist about the nuclear energy issue back in the 1970s,” the film-maker told ES in an interview. “When I saw the Al Gore film — [An] Inconvenient Truth — it really disturbed me and brought my attention to what we’re going to do. And I’ve been very confused since then by all the solutions and all the dialogue . . . I’m not of a scientific background. But I just responded by saying, ‘well, let’s make a movie’.”

The film, directed and narrated by Stone, sets about — for the most part coherently and rationally — dismantling many of the myths surrounding nuclear, in particular surrounding safety.

It does a good job of dispelling some of the common misconceptions around accidents from the 1979 partial meltdown at Three Mile Island in Pennsylvania to the 2011 Fukushima disaster. Neither, he notes, caused immediate casualties. “I didn’t know this, any of this stuff,” said Stone.

He argues that even deaths as a result of Chernobyl — 31 directly and up to 4,000 indirectly — pale in comparison to other major industrial accidents and are “at most a very tiny fraction of fossil fuel deaths”. This is a fair statement, though studies have suggested the full number of people indirectly affected could be far higher.

Those incidents, coupled with fear-mongering by Hollywood, Stone says, have done huge damage to nuclear’s image.

“I would say psychological fear is the biggest factor . . . Uncertainty leads to fear. And people have not really been aware of the science and have not really educated themselves,” he said.

“That was a major problem, because we became biased and evolved into ideological issues, because of Hiroshima and Nagasaki, the horror films of the 1950s and then the misfortunes of the 70s — [The] China Syndrome, Silkwood and probably worst of all, was the Chernobyl series on HBO in the 2000s that reiterated it.”

Nuclear’s significant failings, however, receive barely a mention. The Vogtle plant in Georgia, which is on the brink of bringing online the first new American reactor since 2016, does not feature at all — perhaps because of its ballooning $30bn+ price tag. Though Stone insists its problems are more to do with modern America’s ineffectiveness when it comes to big infrastructure projects than anything else.

The film is sure to stir debate about the role of nuclear power as the world tries to electrify its energy systems.

But its biggest stumbling point could well be Stone himself. The director has made waves by voicing support for Vladimir Putin since Russia’s full-scale invasion of Ukraine. He told The Guardian this week that Putin was a “great leader for his country”.

As one nuclear advocate put it to me: “I’m glad the argument is being made in an accessible way. I’m just not sure I’m glad it’s being made by Oliver Stone.” (Myles McCormick)

Kimmeridge weighs in shale’s future

We had a chance recently to sit down recently with influential activist energy investors Ben Dell and Mark Viviano, managing directors at the investment firm Kimmeridge, to talk about the landscape for oil and gas investment. Here are a few takeaways from the conversation:

1. Gas is the future of shale, again

The American shale revolution took off in the country’s big natural gasfields such as the north-east’s Marcellus in the early 2010s. Investment subsequently migrated into big oilfields in North Dakota and across Texas once horizontal drilling and fracking proved a viable way to pump crude.

But the balance could be shifting back to natural gas for two crucial reasons, argues Viviano. First, the liquefied natural gas export boom has increased access to lucrative international markets.

“We ultimately see a repricing of US natural gas as it gets better connectivity to the global markets,” he said.

Second, Viviano argues, natural gas producers are likely to be looked at more favourably by investors because the fuel is seen as cleaner than oil — and unlike crude, most still see scope for global demand to continue rising. This will be the case especially if gas pushes coal out of the electricity mix in Asia the same way it has in the US.

Gas companies could get a “different valuation multiple” than oil companies because of the better demand growth and “the different perception from an environmental vantage point,” he said.

Dell calls it “one of the biggest mismatches in energy” and argues gas demand will grow for at least the next 25 years.

“There is absolutely no way to meet any carbon targets without natural gas taking market share, without natural gas potentially doubling in volume on a global basis. And it’s being priced as if it’s going out,” he said.

2. Companies are holding back on deals

For years, investors in the US shale patch have beaten the drum for more deals to consolidate a highly fractured corporate landscape. But those deals have been slow in coming.

One big reason, says Viviano, is that many executives and directors don’t want to sell; even if the deal would be good for shareholders.

“I think it’s management incentives. And, increasingly, we’re hearing it’s board of directors that don’t want to give up a position that is increasingly scarce,” he said.

The number of companies in the shale patch is shrinking, not growing, so if you sell, there’s not guarantee another job is coming.

“Ultimately, the board of directors is supposed to represent the shareholder, the owners of the business, but they’re not aligned,” Viviano said.

He says companies should have to disclose when they hold talks about a potential deal so that investors can weigh in, which he argues could spur more much-needed mergers.

3. The shale sector has already drilled its best wells

One of the hottest debates across the shale industry is whether — and how fast — the industry is running out of its best drilling prospects.

Dell argues that we are definitely “seeing degradation play out” and says it is happening across the US.

He also says people should not be surprised because companies have been told by investors not to spend on finding new areas that could refill the pipeline of drilling inventory.

“We didn’t want anyone putting dollars in the ground because they had a terrible track record of doing it. We wanted that cash back,” said Dell.

“It would be like looking at [pharmaceuticals] and saying, I’m not going to invest in any new drugs and then being surprised the pipeline’s getting old,” he added.

The lack of quality drilling prospects is forcing companies to slow their growth, Dell said.

“One of the reasons nobody wants to grow is you don’t have a lot of running room,” he said. (Justin Jacobs, Derek Brower and Myles McCormick)

Data Drill

It’s been a bad few days for oil prices, with Brent and WTI trading close to 12-month lows. The US benchmark settled yesterday at $68.60 a barrel, 4.3 per cent lower on the day and almost 45 per cent below the high price struck after Putin ordered tanks into Ukraine last year.

Brent also dropped by about 4 per cent yesterday following a similar drop on Tuesday. The international marker has lost about $9 a barrel in the past five days.

US recession fears are a chief reason for the sell-off. The number of job openings fell sharply in February; regional US banks appear fragile; and the congressional debt-limit stand-off could leave the federal government without enough cash by June 1, according to Treasury secretary Janet Yellen. With such bearish news swirling around, the market seems willing to shrug off rising Chinese demand and the possibility of supply shortfalls later this year.

Opec+ won’t be happy. But oil prices are now about $5 cheaper than when the cartel announced its big cuts in October (and in early April). Oil prices would probably be even lower had the cuts not been made.

Power Points

Iran seizes second oil tanker in a week as tensions with US increase

Shell, BP and Total out-trade Vitol, Trafigura, Mercuria and Gunvor

Pakistan eyes economic relief from Russian oil imports due in May

Energy Source is written and edited by Derek Brower, Myles McCormick, Justin Jacobs, Amanda Chu and Emily Goldberg. Reach us at and follow us on Twitter at @FTEnergy. Catch up on past editions of the newsletter here.

Energy Source is written and edited by Derek Brower, Myles McCormick, Justin Jacobs, Amanda Chu and Emily Goldberg. Reach us at and follow us on Twitter at @FTEnergy. Catch up on past editions of the newsletter here.