Jim Hughes is a managing partner at EnCap Investments Energy Transition. With origins in upstream oil and gas, EnCap is an investment manager focused on the U.S. energy industry. Kali Persall, editor of Institutional Investing in Infrastructure (i3), and Hughes discussed the U.S. macroeconomic background to the energy transition in a recent video. The following is an excerpt of that conversation.

What are some general observations when it comes to the current U.S. macroeconomic background to the energy transition?

Given the recent change in administration, the increase in interest rates and the overall macroeconomic backdrop, what we view as the investable opportunity set has narrowed quite considerably from, let’s say, five years ago. However, the attractiveness of that narrow segment has increased. We divide the energy transition into three broad buckets: power, fuels and carbon management. With the current administration and challen