Today I attended a conference on Master Limited Partnerships (specifically energy infrastructures) and the following are some of the highlights that transpired from the event.

• The US Energy Renaissance theme was alive and well with predictions of energy independence as early as 2020-2023
• Domestic oil production is at 20 year high
• Natural gas now accounts for 50% of home heating and 30% of power generation
• Shale gas has increased from 11% of total production in 2008 to 34% in 2011 and expectations are for 60% by 2035
• New demand for natural gas will be driven by power generation conversions
• Exports of LNG are expected as early as 2015
• California Monterey Shale may contain 15 billion barrels of oil. Governor Brown recently signed the first California Fracking Law essentially opening up the process of development of the Monterey Shale
• $250 billion to $400 billion of new infrastructures are going to be needed over the next 20 years
• MLP spread to Treasuries is now at 330 bsp. Not very high but higher than pre-crisis average of 225 bps
• MLP Credit Market: current spread implies a rate of default of 10% which is more than 5x historical average

• Policy:

1. 1. 1. 1. 1. No major energy bill is anticipated
            2. Most policies will be led by the Administration and not by Congress; this Administration has shown to be friendly to natural gas