In President Donald Trump’s inauguration speech, he vowed to bring the United States out of the Paris Agreement for climate change, which is an international agreement to combat climate change, where almost 200 countries agree to keep the global temperature increase to below two Celsius and pushing to limit the temperature increase to less than 1.5 Celsius, all countries are obliged to devise its plans to commit to the agreement.
Meanwhile, Trump has also declared a National Energy Emergency to cut energy costs in the U.S., which would involve increasing oil production, oil pipelines, and constructing new oil refineries, aiming to slash Benzin and electricity costs in the U.S. by half during the first year of his second term.
The aggressive stance from the new president sends a strong message on taking a step away from carbon neutral and moving forward on fossil fuel. This would greatly benefit businesses in the fossil fuel sector like natural gas and power plants, which also include many Thai companies that have invested in the U.S.
Thai energy companies like Banpu Public Company Limited (SET: BANPU) and its subsidiary Banpu Power Public Company Limited (SET: BPP), and Electricity Generating Public Company Limited (SET: EGCO) which has invested in clean energy.
However, BANPU and BPP are poised to benefit the most, as the companies operate upstream business in natural gas, and downstream business in electricity generation.
BANPU has invested in 2 Shale Gas in the U.S., which comprise the Marcellus well in Pennsylvania, and the Barnett well in Fort Worth Basin, Texas.
BPP has two natural gas power plants, Temple I and Temple II in Texas, U.S.
More importantly, BANPU also has another subsidiary called BKV Corporation (BKV) which is one of the major natural gas producers in the U.S. and is listed in the U.S. stock exchange. The share price of BKV rose 2% on Tuesday.
As such, BANPU and BPP would directly benefit from Trump’s fossil measure, as natural gas and natural gas power plant businesses are likely to see growth from the previous Joe Biden administration, which curbed fossil fuel to promote clean energy.
Although it is unclear how much would Trump 2.0 facilitate BANPU and BPP growth.
BANPU still has its growth weighed down by its main source of revenue ‘coal’, which many have written off as the growing climate awareness pushes many industries to move away from coal energy for years, thus dampening investor confidence in BANPU’s long-term growth.
