Super-Spiked Podcast Arjun Murti

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We are just back from 8 straight days on the road, so this is going to be a short video podcast that touches upon three themes: (1) pushback on our view that the total addressable market (TAM) for oil is at least double current demand; (2) perspectives on the NVIDIA-like move in merchant power generator equities; and (3) a preview of what's next for the now controversial term "energy transition"? Next weekend we will be enjoying the long Memorial Day holiday, with Super-Spiked returning the first Saturday in June. Enjoy!
🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channel Super-Spiked by Arjun Murti.
* Apple Podcasts, Spotify for audio only. You can subscribe directly to the audio only feed on Apple Podcasts, Spotify or your favorite podcast player app. The podcast is simply the audio for the YouTube videos.
⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.




This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on YouTube by clicking the RED button above.
LISTEN to audio only via the Substack player by clicking the BLUE button above.
STREAM audio only on Apple Podcasts, Spotify, or your favorite podcast player app.
DOWNLOAD a pdf of the slide deck by clicking the blue Download button below.
We follow-up to last week’s post Obliterating Peak Oil Demand: A Progress Update (here). Our main issue with the peak oil demand narrative is that it it doesn’t solve for how everyone on Earth will someday enjoy the lifestyles The Lucky 1 Billion of Us take for granted. We believe the total addressable market (TAM) for oil is 250 million b/d, well above current levels of around 103 million b/d.
The analytical mistake we think many are making is deducting future electric vehicle (EV) growth from something near current oil demand as opposed to from oil’s TAM when everyone on Earth ultimately lives within fully developed economies. Furthermore, EVs only address about 25% of the oil demand barrel and are unlikely to be viable solution for the entirety of even that sliver of demand.
At its core, our long-term outlook for oil demand looks at the relationship between global GDP growth and the quantity of oil demand needed to generate a dollar of GDP. We observe the long-term trend that every year the world generally requires slightly less oil to generate a dollar of GDP, a concept we refer to as “efficiency gains.” In this case, efficiency gains includes both fuel economy (improving miles per gallon) and product substitution (e.g., EVs, SAF, RD). Based on our analysis of “efficiency gains”, there is essentially no evidence oil demand is on-track to plateau let alone decline in coming years. We believe there is not a decade let alone year when anyone today can definitively declare oil demand will peak.
We show two country examples—China and India—which collectively have growth potential of 40-60 million b/d in order to reach a TAM that reflects a 10 barrels of oil demand per capita, consistent with “everyone being rich.” China and India are also examples of what we believe will be the main driver of limiting the TAM of oil markets to something well below 250 million b/d, which is geopolitical security. For countries that are not blessed with abundant crude oil resources, especially sizable ones like China and India, we see a strong motivation to limit growth in oil imports—the ultimate TAM limiter for oil markets.
🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channel Super-Spiked by Arjun Murti.
* Apple Podcasts, Spotify for audio only. You can subscribe directly to the audio only feed on Apple Podcasts, Spotify or your favorite podcast player app. The podcast is simply the audio for the YouTube videos.
⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
* This epi

WATCH the video on YouTube by clicking the RED button above.
LISTEN to audio only via the Substack player by clicking the BLUE button above.
STREAM audio only on Apple Podcasts, Spotify, or your favorite podcast player app.
DOWNLOAD a pdf of the slide deck by clicking the blue Download button below.

We follow up on last week’s deep post (here) on cash return on gross capital invested (CROCI), which we view as a complementary profitability metric to return on capital employed (ROCE). The videopod starts with the reasons to introduce a second, primary metric due to some of the issues with ROCE around write-offs and the inherent incentive to under-invest given the nature of the ROCE calculation. We discuss how CROCI offers different insights at the sub-sector level. Finally, we provide hypothetical examples based on actual company data for two companies that took large write-offs that boosted ROCE in subsequent years; one company continued to lag on CROCI while the other showed fundamental improvement. It is this kind of divergence that we find interesting, especially when ROCE is rendered less meaningful due to recent large impairment charges. As always, we welcome feedback, pushback, and discussion on this (and all!) topics we discuss.
🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channel Super-Spiked by Arjun Murti.
* Apple Podcasts, Spotify for audio only. You can subscribe directly to the audio only feed on Apple Podcasts, Spotify or your favorite podcast player app. The podcast is simply the audio for the YouTube videos.
⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.



This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on YouTube by clicking the RED button above.
LISTEN to audio only via the Substack player by clicking the BLUE button above.
STREAM audio only on Apple Podcasts, Spotify, or your favorite podcast player app.
DOWNLOAD a pdf of the slide deck by clicking the blue Download button below.
We spent this past week in Houston attending CERAWeek 2024. It was another great event; thank you and congratulations to everyone at S&P Global for hosting and putting on a great show!
Coming out of last year’s event, our key theme was “The Energy Transition Needs To Transition” away from an obsessive focus on only counting carbon to one that centered itself around meeting the massive unmet energy needs of everyone on Earth with affordable, reliable, and geopolitically secure energy, which in turn would better enable environmental objectives to be met. A year later, we see “green shoots” that a healthier energy evolution era is emerging and that “The New Energy Transition Narratives” we discuss in this week’s videopod are increasingly aligned with our framing.
Energy demand is increasing nearly everywhere with all energy sources and a host of both traditional and new technologies. The developing world appears to be gaining confidence to go its own way, with diminishing western world influence. And the new trend of artificial intelligence (AI)-driven power demand growth is waking the US up to the needs for an “all of the above” energy approach if we are to have reliable and growing power generation. See our post from last week, “Will AI Be Our Salvation To A Healthier Energy Evolution?” (here).
We see the potential for new business models, collaborations, and partnerships across energy value chains and between energy suppliers and users (Tech and Industrial sectors in particular) to be a likely future trend. It is about as interesting and dynamic of a period in the energy sector as we can remember over our 32-year career.
We would like to wish everyone that celebrates a Happy Easter. We too will be enjoying the long weekend and will publish our next Super-Spiked in two weeks.

🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channel Super-Spiked by Arjun Murti.
* Apple Podcasts, Spotify for audio only. You can subscribe directly to the audio only feed on Apple Podcasts, Spotify or your favorite podcast player app. The podcast is simply the audio for the YouTube videos.
⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.


This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit arjunmurti.substack.com

WATCH the video on YouTube by clicking the RED button above.
LISTEN to audio only via the Substack player by clicking the BLUE button above.
STREAM audio only on Apple Podcasts, Spotify, or your favorite podcast player app.
DOWNLOAD a pdf of the slide deck by clicking the blue Download button below.
We focus on some of the big macro themes that have emerged from earnings season across the broader stock market, with a focus on electric vehicle (EV) adoption S-curves, artificial intelligence (AI), ongoing US energy sector M&A, and the role of Canadian energy companies looking forward. Trends with both EVs and AI add to our confidence that demand for all sources of energy, including oil and natural gas, will continue to grow for the foreseeable future. We do not believe anyone can know today which decade let alone year that oil or natural gas will definitively peak.
We would encourage readers to review Ford CEO Jim Farley’s introductory remarks on Ford’s 4Q2023 earnings call. Mr. Farley recognized the challenges Ford is facing in ramping EV sales; and while the company remains committed to longer-term EV growth, it is clearly going to be at a slower pace than what was envisioned even one year ago. At the same time, Mr. Farley noted an uptick in hybrid vehicle sales, which, ironically, may be the technology most appropriate for US consumers and could eventually, and finally, lead to marked improvements in fuel economy.
It has long been our view that it is inappropriate to use a uniform rapid EV adoption “s-curve” in all regions; we do not believe the examples of Norway (driven by climate policy) or China (driven by geopolitical security) will be representative of the United States, India, or many other developing countries. As it relates to traditional energy, we believe the belief that rapid global EV adoption will lead to oil demand rolling over within the next 5-10 years is not anywhere near on track to occur, especially when one considers the massive untapped energy demand of the other 7 billion on Earth that are not amongst The Lucky 1 Billion of us.
We recognize that “AI” has become a major buzzword, and with that likely comes some hype and over-enthusiasm about the subject. That said, we are believers that the next major technology revolution is here. The relevance to energy is that implied power demand from AI technology use, datacenters, and related infrastructure will be massive. After about 20 years of broadly flat US power demand, low-to-mid-single digit load growth appears to have returned (even higher in some regions). Load growth and growing penetration of intermittent resources like solar and wind are an unhealthy mix—a point that does not appear to be lost on the giant technology companies.
In our view, it may well be AI that proves to be our salvation when it comes to what we have called “a messy energy transition era.” The general freak-out by many Big Tech firms over how to source power while also meeting sustainability goals, we believe could lead to a healthier narrative around energy overall. Big Tech is going to need “all of the above” energy solutions that can meet growing power demand. Near-zero methane natural gas along with nuclear are going to be important components of our power generation mix along with rising renewables output.
🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channe

Note: this is republication in order to upload the audio to Apple Podcasts and Spotify.
WATCH the video on YouTube by clicking the RED button above.
LISTEN to audio only via the Substack player by clicking the BLUEbutton above.
STREAM audio only on Apple Podcasts, Spotify, or your favorite podcast player app.
DOWNLOAD a pdf of the slide deck by clicking the blue Download button below.
We return to our sub-theme of "Goodbye Europe, Hello Rest of World" sparked by Barclay's updated Climate Change Statement (here and here), evidence of structural de-industrialization in Germany, and our recent analysis on Norway's resilient overall oil demand despite gasoline erosion due to its electric vehicle (EV) ramp.
With Europe fading as a core driver of global GDP growth, our macro focus is on how key population centers in Asia, in particular China (1.4 billion people), India (1.4 billion people), and the rest of southeast Asia (1.3 billion people) will meet their massive unmet energy needs. Climate policies being pursued in Western Europe, the United States, and Canada that disproportionately and perplexingly negatively impact traditional energy companies in their home regions is one of the key contributing factors to the messy energy transition era. For developing Asia, it remains an open question as to whether American and Canadian oil and natural gas (via LNG) will be part of the solution or will they instead need to rely on the Middle East and Russia.
Barclay's updated Climate Change Statement that promises to stop financing new oil and gas fields and infrastructure expansion is the latest example of a western-world financial institution succumbing to pressure from "climate only" ideologues. It is deeply unfortunate. Germany's ill-advised energy and climate policies are undoubtedly a major contributor to its relatively high power prices and undeniable signs of structural de-industrialization. Norway's rapid EV ramp shows how hard it is to kill overall oil demand—a fact "net zero by 2050" scenarios bizarrely ignore. Ill-advised energy and climate policies from European governments and, increasingly, financial institutions like Munich Re and Barclays (among many others) is contributing heavily to what we call a messy energy transition era—our motivation for creating Super-Spiked.
🔔 4 Ways to Subscribe
* All Content: If you subscribe to Super-Spiked via email, you will receive all content to your inbox and it is also all on the Super-Spiked website. I have been aiming to publish about once a week, usually on Saturday.
Subscribe to Super-Spiked to receive all content via email and directly interact with me. Also available at https://veriten.com.

* Veriten: You can now also subscribe to Super-Spiked content via the Veriten website (here) and also receive Veriten’s flagship COBT video podcast.
* YouTube channel for video only: You can subscribe directly to the video feed of
Super-Spiked Videopods on my YouTube channel Super-Spiked by Arjun Murti.
* Apple Podcasts, Spotify for audio only. You can subscribe directly to the audio only feed on Apple Podcasts, Spotify or your favorite podcast player app. The podcast is simply the audio for the YouTube videos.
⚖️Disclaimer
I certify that these are my personal, strongly held views at the time of this post. My views are my own and not attributable to any affiliation, past or present. This is not an investment newsletter and there is no financial advice explicitly or implicitly provided here. My views can and will change in the future as warranted by updated analyses and developments. Some of my comments are made in jest for entertainment purposes; I sincerely mean no offense to anyone that takes issue.
📜 Credits
* Intro & Outro music: Wolf Hoffman: Concerto for 2 Cellos in G Minor, Rv 531: I. Allegro Moderato.
* This episode of Super-Spiked Videopods was edited and produced by Veriten Productions.


This is a public episode. If you would like to discuss this with other subs