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"They aren’t making more land" is a classic real estate saying used for generations. It highlights the scarcity of land, one of the main rationales for investing with a long-term view. Premier real estate properties have been a great source of return since the location can’t be duplicated, and they create cash flows that exceed or at least grow with inflation. Interestingly, these themes have a lot of parallels in the oil and gas space today. The best resource was already rare, but now ESG dynamics, combined with inflation and labor shortages, are making it almost impossible to duplicate significant assets. "They aren’t making more" may become the relevant phrase in energy, and nowhere is this truer than the oil sands in Canada. Every day, it becomes more challenging to receive permits for large projects globally. This is double true for energy projects as additional regulatory bodies are present and ESG considerations are accelerating. The fact multiple wind and solar projects have been delayed or outright blocked should give a sense of how difficult it is to do large projects anymore. These renewable projects are the exact ones that ESG stakeholders should want to see. Still, the movement has […]
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