My guest today is Matthew Smith. Matthew is the founder and CIO of Chronometer Partners, which invests in energy, industrials, materials, power and utilities, and related infrastructure.

For the last 18 months he and his team have modeled nearly every natural gas well, pipeline, and processing asset in the United States. He's reached a conclusion most of the market doesn't share. 

Starting in 2028, AI data centers and LNG exports will need more gas than the country can produce and deliver. By his math, the US could exhaust its working natural gas storage by 2030. In his words, the upside risk to prices becomes unbounded and convex.

We talk about why this was set in motion long before AI arrived, why the US can't just turn off exports, who wins and loses among producers, nuclear, solar, and the hyperscalers, and what he sees as the only long-term solution.

Please enjoy my conversation with Matthew Smith.

For the full show notes, transcript, and links to mentioned content, check out the episode page ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠here⁠⁠⁠⁠⁠. 

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In June, Matthew wrote a letter to a small group of confidants laying out the full case behind his natural gas forecast. He has allowed us to publish it. You can read the full letter here.

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Editing and post-production work for this episode was provided by The Podcast Consultant.

Timestamps:

(00:00:00) Welcome to Invest Like the Best

(00:02:02) Episode Intro: Matt Smith

(00:03:33) The Conclusion After 18 Months

(00:04:56) The Die Was Cast Before AI

(00:07:24) Sizing AI's Gas Demand

(00:09:33) Why Not Just Stop Exporting?

(00:11:38) Is the Gas Even There?

(00:13:53) The Timing Problem, Not Supply

(00:15:15) Flow Versus Stock

(00:19:10) What Slows Gas to Market

(00:22:21) If Nothing Changes by 2030

(00:26:11) Could Prices Hit Twenty Dollars?

(00:27:00) Gas Producers Poised to Win

(00:28:54) Utility-Scale Solar's Windfall

(00:30:08) What About Nuclear?

(00:32:40) SMRs

(00:34:29) The US Consumer Pays

(00:36:37) Turbine Makers Building Too Late

(00:37:57) Are Hyperscalers Exposed Too?

(00:44:25) Kickstarting the Nuclear Build

(00:46:20) Put Solar on Every Roof

(00:46:52) Implications for the World

(00:49:26) No One's Securing Supply

(00:52:57) The Challenge for Energy CEOs