The problem with the central banks.

[Martinghoul]

No. Renewables benefit far more from subsidies and all that jazz. We do have a co2 mandate that has to be met by 2020 or 2025 whichever it is. So there are huge incentives to lending to that sector and it will only grow regardless of where rates are. Btw, I'm not arguing against the shale boom, just saying there are residual effects to everything.

OKI-DOKI!

 

[m1nt]

Actually low interest rates were one of the key drivers behind the shale boom. Energy companies are highly rate sensitive and most of the marginal drillers out there could never have stayed solvent without low rates and others desperately searching for yield and lending to them. I think you accidentally stepped into that pile piezoe.

Yes. Thank you monsieurs Bernanke et al. for the cheap gas and short targets. I wish to thank all involved for letting me drive a gas guzzler again. . I heart central banks.

 

[piezoe]

Actually low interest rates were one of the key drivers behind the shale boom. Energy companies are highly rate sensitive and most of the marginal drillers out there could never have stayed solvent without low rates and others desperately searching for yield and lending to them. I think you accidentally stepped into that pile piezoe.

I guess so. And there are people here who will never let me forget it. But of course low rates help everyone who wants to borrow longer term, because the probability that their real rate will drop over time is favorable. I took advantage near the bottom, I hope you did to.

 

[felixbocharov]

Haha, if there's one thing they do care about in Europe, it's farmers, especially the French ones. Common Agricultural Policy is more than 40% of the EU's annual budget.

they cure nothing. they kick the can down the road. they exacerbate the problem. they are nothing but engines of inflation. they are hand maidens of the politicos. they enable their excesses by creating inflation to extinguish the excess debt created by the political class.

How do you like Yellen today?

 

[felixbocharov]

Actually low interest rates were one of the key drivers behind the shale boom. Energy companies are highly rate sensitive and most of the marginal drillers out there could never have stayed solvent without low rates and others desperately searching for yield and lending to them. I think you accidentally stepped into that pile piezoe.

Seems like oil lobby in Washington actually works. Luckily, we still don't have negative interest rates.

 

[Maverick74]

I guess so. And there are people here who will never let me forget it.

I'm just saying there are unintended consequences to everything. I think the shale example was a poor choice because one of the downsides to keep rates low is the reach for yield and this spillover went into the MLP space with a vengeance. Of course they got crushed. Another bubble that popped.

 

[felixbocharov]

I thought the shale boom was, generally, a good thing for the US of A. Energy independence and all that jazz, innit?

Also, don't low interest rates help solar and other "clean energy" producers even more? For instance, based on the numbers I have seen, while the aggregate net debt of US oil and gas producers doubled between 2010 and 2015 (from $81bn to $169bn), the solar project debt financing more than tripled between 2014 and 2015 (from $1.5bn to $5bn).

Honestly, who cares about our oil and gas producers, there are only few real beneficiaries here while the whole economy suffers.

 

[Maverick74]

Seems like oil lobby in Washington actually works. Luckily, we still don't have negative interest rates.

ALL the lobbies in Washington works. That's a big part of the problem.

 

[felixbocharov]

No. Renewables benefit far more from subsidies and all that jazz. We do have a co2 mandate that has to be met by 2020 or 2025 whichever it is. So there are huge incentives to lending to that sector and it will only grow regardless of where rates are. Btw, I'm not arguing against the shale boom, just saying there are residual effects to everything.

That's true, solar companies are benefiting from subsidies more than from low-interest rates. That's why these guys probably really want Bernie as the President.

 

[felixbocharov]

ALL the lobbies in Washington works. That's a big part of the problem.

But this is how it works, in order to change it you need to change the process of candidates financing, which probably won't be easy at all.