Steve Bleiberg
Hello, and welcome to Actively Speaking. I'm your host, Steve Bleiberg. Join us each episode as we discuss current issues concerning capital markets and portfolio management from the perspective of an active manager. Hello everyone. Welcome back to another episode of Actively Speaking. And today we are going to talk about the energy transition that's going on in the world, trying to assess the state of that and, whether people's expectations or views about where that's heading are correct or not. To discuss that with me, I have Steve Salzone, who is an analyst and portfolio manager on our US fundamental Equity team. Steve was a guest on the podcast a few years ago. I think we talked about, the used car market, as I recall.
Steve Salzone
That's Right
Steve Bleiberg
So welcome Steve.
Steve Salzone
Thank you. Thank you for having me.
Steve Bleiberg
My pleasure. So let's talk about the energy transition. I think there's a popular perception, you know, at least the way the press tends to portray this situation, is that this is happening. It's, there's no turning back. It's going to be successful and so on. And, I think that that may be a bit of a not an accurate description. So I wanted to get some input from somebody who knows a lot about this. So tell me, where do we stand today in terms of the transition, both in the US and globally in terms of the transition from the reliance on fossil fuels to more renewable sources of energy? Where do we stand today? What are we, what is the breakdown these days of sources of energy generation? And how has that changed, over the last, say, 10 years, 20 years?
Steve Salzone
Sure. So yeah, so these energy transitions have happened over time for mankind and I think it's important to keep in mind that these actually take a really long time. And a couple other things to keep in mind as we talk through this topic today is to always keep in mind whether we're talking about levels or percent mix. Often times people associate the mix percentage, meaning that source is going down, but a lot of times it's actually not going down in absolute terms. It's just getting smaller as a percentage of the mix. And that's because we're actually using more energy over time. But just to frame it in terms of where we are today, we can look at this both in the US as well as globally. So in the US today, when you talk about primary energy consumption, 79% is still actually fossil fuels, which I think is much more than people think. You the way that that 79% breaks down, would be about 36% of that would be the typical gas, diesel and jet fuel that you think about, which is largely associated with transportation. The other really big piece, about 33%, is natural gas. And the biggest use of natural gas is actually, producing electricity. Of course, it's also used to heat homes and to cook with and things like that. But that's a really big piece, and that's actually been one of the pieces that's been growing the fastest, really around electricity production over the past 20 years or so. The last piece of that would be coal, which is still about 10%, and that's the one that's been going down the most, at least in terms of percentage mix. And that's really being replaced by natural gas, and that's a good thing. I think it's important to note that the total carbon impact or emissions, everything associated with that source of energy, natural gas is about half of the carbon impact of coal.
So we like to see that transition still has a long way to go, but that's been a nice evolution over the past few decades to see, less reliance on coal. And that largely being made up with natural gas. Now, renewables actually make up a pretty small piece, it's only about 13% today, and wind and hydro make up the largest amount of that. And actually hydroelectric power has been around for a really long time. It's still a very stable source across the globe. Obviously it's very geographic dependent, but that's really the renewable that's been around the longest. And, the only problem with that is it isn't really growing. It's very hard to get permissions to build a new hydroelectric plant. The other piece that I didn't mention yet is nuclear. And what's interesting about nuclear is while it's not generally considered a renewable energy source, it actually has very low emissions. And when it's run without any types of Chernobyl type accidents, it's very efficient, very energy dense. And it's actually been a very steady source of energy for the United States for, really several decades really going back into the seventies and the eighties. It's been a very, very stable source. So that's really where, where we stand today, in the US
Steve Bleiberg
Is the picture very different globally now?
Steve Salzone
For now globally it's a little bit different, and the main driver of that is, we have to consider emerging markets and other developing countries which have a much heavier reliance on fossil fuels. So in the US I mentioned fossil fuels today makes up about 79% of the energy mix, and globally it's about 82%, so it's a little bit higher. And globally, if you go back to the year 2000 or so, that 82% mix of fossil fuels was about 86%. So you could see over the past, you know, 23, 24 years, we've only taken that global mix of fossil fuels from 86% down to 82%. So whether you're talking about the US or globally, it still makes up a very large portion of energy consumption and I think I mentioned this briefly in terms of coal and natural gas in the United States, it's important to note that when you think of very large countries such as India or China in terms of population, their coal usage continues to go up and is a very important fuel for them. Because one of the things about coal, or really two things about coal. Number one, it's very energy dense. And number two, it's very easy to store. So if you think about a country and you need dispatchable energy, for coal you literally can just pile it up in a giant pile and access it whenever you need it. You don't need to build very specialized tanks or you don't need to compress it, you can move it around and just about any type of truck or move it over water in a big barge. So while it has a very high carbon impact on the environment, it's very energy dense, relatively cheap and easy to store and move around.
Steve Beliberg
Okay, so that's a good perspective on where we are today. And now you mentioned this topic here of like energy density, and that leads to a discussion of how does this transition that people are envisioning compare to previous transitions? Because normally, I think, historically, transitions have generally gone from less dense to more dense sources of energy, but it seems like this transition is going in the other direction.
Steve Salzone
Yeah, that's a really good question and a really important point. So, maybe let's talk a little bit about energy transitions and how they've occurred over time, because there's a few nuances to what happens in reality versus maybe perception, but you're right, there are a few things about energy transitions that tend to happen. Usually they're more dense, or better in some way or another. And, you know, this time it's a little bit different. Now, it's also important to note that what we're trying to get out of the newer sources of energy, meaning renewables, is something that wasn't really taken into consideration over the past couple centuries. And that's the impact on the environment, right? So the goal is, you would be giving up things like energy density and maybe even cost, but you'd be making up for that, hopefully on, the impact to the environment.
So it is fair to kind of frame it in that context, butut if you look at energy transitions, really since the early 1800's, and you could even extend that back much further, really the main source of fuel would be what we would call traditional biomass, which would largely be wood. And in some areas it would actually be animal dung, which was used to create fires and to actually cook with. And that was really the primary way that we used energy. There was also some hydro that goes back very far, if you think about a water wheel for milling and grinding and different things like that, sawmills, and different areas, wind actually goes back really far and used for the same types of mechanical advantages, but coal was really the first major part of the transition where we got away from wood.
And that goes all the way back to the late 1800s, actually mid 1800s to late 1800s when we came up with steam power. That was the first real advent to mobility if you think about it. And being able to move large amounts of goods or people by rail, and ships. And then after coal, we discovered oil, and that became, obviously, that led into gasoline and diesel and things like that. And that went on for a while. And then natural gas really started to pick up in, the middle of the 20th century, call it the 1950s or so. And that's really been growing pretty dramatically, especially in the last 20 or 30 years. And that's largely been offsetting coal usage, at least in the US. Nuclear obviously kind of became popular in the sixties and seventies and into the eighties.
A lot of that has slowed down just due to some accidents that we all can remember either in our history books or perhaps even living through the news. And then renewables has only really been growing for the past, really meaningfully, for the past 10 years or so. And the thing about renewables is, in order to consider it on an apples to apples basis, you really have to consider storage. Storage is incredibly important because without storage, it's not dispatchable and you have to rely on, you know, when the sun is shining or when the wind is blowing, as I think we all know, the sun, does not shine at night. So that's a little bit of an issue, but they're working on storage and I think, you know, storage is one of those things that we're probably going to need a step function in some type of new technology. Today, when people talk about storage, they really talk about it in terms of a matter of hours. And we really need to get to a point when we talk about storage, we can talk about a matter of days. And, there's both physical limitations in terms of the materials that go into storage, into batteries and there's obviously the cost element. And that kind of really prevents that from being a very large percentage of this energy transition until we can, accomplish that storage.
Steve Bleiberg
Okay. You've, you've raised an interesting angle at one point here in our discussion about the difference between the mix versus the absolute level. And so, for example, you just, you referred a few minutes ago to biomass as having, you know, once been the primary source of energy, things like wood and dung. And what I think is fascinating is that if you compare us to, say, 200 years ago, yes, the percentage in the mix that of energy that we get from biomass has gone way down, but actually the level hasn't really gone down over time. There's still just as much, energy being generated from wood and other biomass sources, as was the case 200 years ago. What's different is that we're just using so much more energy now than we were back then, and it's all the discovery of new sources of energy, like, you know, oil and natural gas has enabled us to just ramp up our energy usage dramatically over time.
But what's really interesting is that in one specific form of energy, which is electricity in the US or sort of a use of energy to generate electricity, there really hasn't been, much of an increase over the last, say, 10 or 15 years. Electricity usage in US, has actually been kind of flat for a while now. Let's talk about why that's been the case. Number one, how have we been able to do that? And number two, though we're talking nowadays about electrifying so much more of our energy usage, things like transitioning cars from, gasoline to electric, are we nearing the end of that plateauing of electricity demand? You know, how is that need for storage going to interact with this? Like, if we're going to be using more electricity, is that going to be dependent on our ability to develop better methods of storage for us to even be able to do that? And just in general, what do you think is going to happen with electricity usage is it going to go up, will it continue to be flat, and how are we going to handle that?
Steve Salzone
Yeah, so there's a lot of interesting points, in those series of questions. I think one thing to mention upfront is that, like you said, usually with these energy transitions, we layer a new type of energy on top of what we already have and use. And the reason is because demand for energy continues to go up. And while that's sort of obvious, I think it's important to just state the reason why demand for energy goes up. And that's because energy is directly correlated with economic activity. So as we become larger, whether it's population, or we come become more productive as a society, as a world, we need more energy. The other thing is standard of living. As that goes up, that requires more energy, and it's a lot of things. It's not just the creature comforts, it's the types of food that we eat, the variety and ample supply of food. It's mobility, it's air conditioning, it's really everything that we do that makes one's life more comfortable and more desirable requires more energy. Now in the US we have had this period of time, really since around call it year 2000 when we developed the internet and became more popular for the next 20 years or so. The electricity demand was actually pretty flat. And what happened over that period of time, and of course before that going up very steadily, but what happened is there was a lot of efficiencies that came out of that time period. Just about everything that we used electricity for became more and more efficient. Even just the computer in general allowed us to do lots of things that we would've taken much more energy and more time we were able to do it online.
So there's a lot of examples of that, but you're right, we did have a period of time, almost like this 20 year period of time, the golden age of efficiency, where we were able to live our better lives and do things, more online instead of moving around the country to do things that, we traditionally would've had to get around to do. But we are going into a period of time where we're trying to be more efficient from a a climate standpoint, from a pollution standpoint. And with that, one of the solutions is to use electricity. So there's this concept of electrifying everything. We, we often think of it in terms of EVs, but it's also heat pumps and other types of things. Now, the problem with that is, while we we give up one energy source, we're using another one, and we have to produce that electricity somehow.
And we could talk a bit about the sources of, that electricity, but there's really no forecast that, that I'm aware of anyway, that says that electricity will remain flat in terms of the demand, both globally and also in the US and even before AI, which is a whole thing onto its own in terms of the range of forecast for the future. This electrification of everything is really going to be driving demand for electricity. And the reality is we have not really invested in our grid both the sources of that electricity and the ability to move that electricity around the country to meet demand where it's at. So there's probably going to have to be a lot more investment in the grid. And when it comes to storage, I don't think that's going to really be able to be ramped up quick enough to meet that demand.
So what does that mean? Well, that means we'll probably continue to need more natural gas, which is very easily dispatchable. It's also, much cleaner than coal. As I mentioned, it's about half the carbon emissions is coal. So I'll leave there maybe for the moment to see if you have follow-ups, but I think the big takeaways are that energy is tied to economic activity. It's tied to increasing standards of living. And just when you think we go through a period of time where we're getting more and more efficient, we come up with some type of new technology or some type of new thing that we want, that then again, puts us on that path to require more energy per capita.
Steve Bleiberg
Yes. Well, I mean, I just recently saw some, you saw this too, this information about like the amount of energy required. You mentioned AI you the impact that's going to have. Obviously you've got all these massive data centers that are going to need to be powered. And just the AI itself uses so much more energy than say, a standard text search. It's like if, the data I saw was looking at the multiple, how much as a multiple of energy usage compared to how much does it take to just do a simple text search on Google. Like, you know, where's the nearest, you know, CVS near me by comparison, or generating like an AI image requires, you know, like more than a thousand times more energy, I think was the number, does that ring a bell?
Steve Salzone
Yeah. So it's incredible. I mean, when you think about it, when you typically, you know, you Google something, you're really just looking on the internet for something that's already there and you're just trying to find access to it. With the advent of AI, you're actually generating new information. It's actually, you know, using what's out there on the internet to come together and actually build a response or to create an image. So the amount of electricity usage is astronomical. I mean, the range of forecasts out there for electricity usage are quite wide and quite varied. And I think the reality is we don't really know. Now history would suggest that we'll get more efficient. So in other words, the chips being produced maybe 10 years from now, will use a lot less electricity than the ones that we use today.
So that's good. But then history also suggests that when you are able to do something more efficiently, you don't just use less electricity, you maybe use more or just as much to have something more powerful, right? So, in other words, to build a data center that's going to use one gigawatt, if we can figure out a way to do it with half a gigawatt, we're just going to build two data centers, as opposed to having just one right. That's half a gigawatt and think like we saved electricity. And again, it's all tied to energy consumption with standard of living, economic activity. And historically we've never seen a period of time where we've just been like, you know what? Let's just save energy and live a simpler life. That just just doesn't resonate with me. And I don't think there's any data in terms of mankind where that's occurred, other than the times of plagues and things like that, which I don't think we want to relive. So it does seem like, in any case, we're going to be using more energy for really forever and we'll just hopefully live better, more fruitful lives, but it doesn't seem like we're going to be enjoying efficiency to the point where we actually use less energy.
Steve Bleiberg
I want to ask you about one very specific area of energy usage, which is aviation, because I think that seems to be an area that's, so far very hard to envision electrifying that, is that accurate?
Steve Salzone
Yeah, so I think, you know, with technology where it stands today, if you think about commercial aviation or, moving freight by air, you can do an electric plane, but you just can't put anybody on it or put anything in the plane. The passengers are, the freight is basically the battery. So we're a long way from that. But it is an interesting point because, you know, when we think about oil specifically, we think about cars and trucks and we say, okay, that's a big piece of a barrel of oil. If we can electrify the trucks, generate electricity with renewables or natural gas or things that are more, environmentally friendly, then we should be good. We can use a lot less oil. But oil is, you know, a barrel of oil is a barrel of oil. It's not a barrel of water. So, when you think about oil, it gets refined, goes through a various refining process, and you get various products out of that barrel of oil. So if, let's just touch on that for a little bit. So if you take a barrel of oil, about half of that becomes gasoline. About a quarter of that becomes diesel, which, you know, trucking, a little bit of heating, but only like seven to 10% of that barrel of oil becomes jet fuel. So you say, well, wait a second, how are we going to make more jet fuel? Because, aviation continues to grow, demand for air travel continues to grow. You have, a very different segment of the population globally that's able to fly. And that's been something that when people that the standard of living goes up, one of the few things that they like to have right away is a more comfortable climate, meaning air conditioning. And they also like mobility. So they want to get a car eventually, they want to be able to fly someplace, you know, see the world. So big picture demand for jet fuel shows no sign of going down. There's absolutely no solution to that issue. Sometimes people talk about, sustainable aviation fuels, but that's such a small piece of total jet fuel that it's really not moving the needle and probably won't anytime soon. So that, that, that creates an interesting situation. So maybe just to play it forward a little bit, you could have a situation where jet fuel demand is driving oil demand and gasoline and diesel fuel perhaps are actually more byproducts. And really the reason why we're drilling for oil is to get more jet fuel.
Steve Bleiberg
And just to be clear, when you talk about that mix between how, how much of a barrel of oil turns into gasoline versus diesel versus jet fuel, that's not a choice. That's dictated by chemistry. We couldn't just say, oh we'll just use oil, you know, we'll turn a hundred percent of it into jet fuel. That's just not physically possible.
Steve Salzone
Right. So there's a, there's a few pieces in there where it can be tweaked to a degree. So I actually was recently speaking with the CEO of a major refiner in the US and I asked him that question. I said, you know, generally the rule of thumb is 7% to 9% of a barrel of oil becomes jet fuel, and that's dictated by that the grade of crude. So there's different types of crude oil as well as the refiner that it's going into. So if you build a refiner and your goal with that refinery is to get as much jet fuel as possible, you could tweak it up a little bit and there'll be less efficient other aspects of it. But in terms of jet fuel, you can optimize for that. So I asked them, you know, how high could it go if you had the perfect type of crude oil grade?
You know, I think it'd be light and sweet if I remember correctly, but the perfect type of crude, and then you built a brand new refinery to maximize, totally optimize and focus on jet fuel. He said, well, maybe you could get it to 15%. So I'm like, oh, really? Well, that's pretty good. That almost would be a doubling. And then I was reminded that the fleet of refiners globally is actually quite old. It's pretty close to capacity. Nobody seems to want to build a refinery, at least not in the West. You can't put in the most optimal type of crude all the time for that. So the ability to move that from call it high single digit up to 15%, that's really not going to happen. The amount of capbacks that would be required to build a whole new, fleet of refineries, it just isn't going to happen. So if gets tweaked up, it would be to a very small degree, but then you could say, okay, well maybe the planes could be a little bit different. Maybe they could be more efficient, maybe they could, we could change the jet engines to run on a different formulation. And both of those things are true, but maybe less impactful. So yes, you could actually change the technology of a jet engine to run on a slightly different grade of fuel. But if you think about it, we already have a fleet of jets out there, we're probably not going to remove the engines and put something on there that can run on a slightly different grade of fuel.
You have infrastructure going back to the refineries. We have a refinery infrastructure that's already producing the type of fuel. There's, a safety issue here. So this would all have to be approved by the different governing agencies in the US and globally as well as the manufacturers of the jet engines. So, okay, that's probably not going to happen anytime soon either, that's going to take a long time and lots of coordination, but they can get more efficient. And the reality is they are getting more efficient. In fact, the latest types of new jet airliners are coming out there are more efficient. But again, that takes time to play through the global fleet of aircraft. Right. And again, we're, we'll largely be adding to the fleet. It's not like we're just going to swap the fleet in any given year. So I think the point there is that this is an aspect that's often not focused on, because it's easy to talk about cars and trucks and electrifying them, but if we need jet fuel and we need more and more jet fuel, I don't know how we're going to, do that with less oil.
Steve Bleiberg
Okay. Let's try to wrap this all up, put it all together. So, you've given us good picture of sort of where, where the transition stands, which is, it hasn't actually made that much progress, as you noted at the beginning. I think global, we've, you know, we've knocked down the mix of by about four percentage points in terms of fossil fuels relative to other sources of energy. Now we're looking at a world where we're trying to electrify everything. We've got AI coming to the mix, we've got, data centers, we've got, the fact that jet fuel can't really be replaced at this point. It seems like progress will continue to be very slow then in terms of transitioning away from fossil fuels towards more renewables. And if anything, it may be that, as we've discussed with many of these transitions in the past, the level of fossil fuel use at best would, wouldn't even go down.
It would just be that if we could supplement it with other sources of energy, that would be good. But total energy demand is likely to continue to rise as particularly as you say, countries like India and China want to raise their standard of living, which requires more energy. So overall, it looks, it seems like, you know, fossil fuels are unlikely to really be going away anytime soon. And, so my last question really is have we, and I you alluded to this earlier, have we under invested in, you know, the extraction you use of fossil fuels on the kind of mistaken assumption that well, we're not going to need them within, within few years, so there's no point in investing in this. You know, people refer to this as a stranded technology, that kind of thing, but it sounds like it's not going to be stranded anytime soon. We're still going to need this stuff, we're still going to need to figure out how to extract it, you know, and so forth. So do you, this is an investment podcast in the end, do you foresee, you know, significantly higher investment in fossil fuels over the next decade?
Steve Salzone
So on this energy transition, I guess, you know, one way to frame it would be that this time isn't different and it will be a similar transition as we've seen in the past. It will take a lot longer probably than we all hope. And the implications on the investing side of that is that, you're right, a lot of energy companies have shifted their CapEx, in a couple different ways. Number one, they're doing less exploring and they're spending less money on trying to find new places to find oil. And one of the reasons for that is because they've actually gotten more and more efficient, and they're able to get more oil out of the ground, per well, some of that is technology of fracking, things like that. But the problem is, if we start running low on those resources, there isn't a long backlog of new places to get oil, because that money is just really not being spent in the way that it used to be.
Also, the other difference is also these companies are spending more money on what you would call shorter cycle projects. So these are CapEx dollars that are being spent today where they're looking to be getting a return in the next few years as opposed to the next 10 or 20 years. So that means fewer offshore drilling type projects, fewer projects in different parts of the world that are more underdeveloped. So there is a real question and a real concern, which is, you know, have we under invested in this industry under the assumption, and you basically said this, but we've under invested under this assumption that we're not going to need hydrocarbons or fossil fuels, and that we're going to get to a place where we say, oh my goodness, we don't have the fossil fuels and we still need them, and we're still going to need them for, three or four more decades.
So that is certainly a risk. And I don't know if there's an easy answer to that other than the fact that I think today we are seeing a little more acknowledgement that this energy transition is taking longer than we hoped, and we're seeing a little bit more willingness for companies to at least consider making those investments. And also, the policy makers being a little bit more open to the concept of fossil fuels. We all, I think, you know, everyone wants less pollution. Everybody wants, you know, happier environment. It's not that we're rooting against that, but we also don't want to see the standard of living for human beings to go down, and the importance of energy for humans is, you know, it's really tied at the hip. So we are starting to see some companies talk about, some longer cycle projects, but it's probably not where it needs to be.
And the end result of that one possibility is certainly that energy prices remain somewhat high, and that's something to keep in mind. And there's actually some good data on that as well. So if you think about the US, there's varied policies across the country, and then if you think globally, there's varied policies, you know, by country, and one way to measure that would be the cost of electricity. So if you think about the cost of electricity in a place like Texas, which is well known for being, what we can call regulatory light, it's about half the cost per kilowatt hour versus a state like California. And if you think about outside the US in parts of Europe, it can even be twice the cost that people pay in California. So there is an implication to these policies and to these decisions, and some of that is probably going to maybe change some of the policies or tweak them to be a little bit more sympathetic to lower cost and more efficient ways to produce energy and which fossil fuels is still a really big part of that.
Steve Bleiberg
Well, we should, before we close, we should acknowledge that, you know, the wild card in all of this is some amazing technological breakthrough. That renders all of this moot. You know, somebody sitting around in 1850 worrying about the difficulty of getting more whale oil over the next 50 years had no idea that somebody was about to discover petrol in the ground and the impact that that would have. So anything could happen, you know, this could all, as I said, be rendered moot at some point. Anybody listening to this podcast years from now could be laughing at us for being worried about these issues. But anyway, this has been a great discussion. Steve, thanks for joining me.
Steve Salzone
Absolutely. Yeah, thanks for having me.
Steve Bleiberg
And, thanks for listening and we'll see you on our next episode. Remember to subscribe to actively speaking on Apple Podcast, Spotify or Google Play. You can find all of our previous episodes and additional content on our website, www.tdgis.com.
For institutional investors only, TD Global Investment Solutions represents TD Asset Management, incorporated, or TDAM and Epoch Investment Partners Incorporated, or TD Epoch. TDAM and TD Epoch are affiliates and wholly owned subsidiaries of the Toronto Dominion Bank. The TD logo and other TD trademarks are the property of the Toronto Dominion Bank or its subsidiaries. The information contained herein is distributed for informational purposes only and should not be considered investment advice or a recommendation of any particular security strategy or investment product. The information is distributed with the understanding that the recipient has sufficient knowledge and experience to be able to understand and make their own evaluation of the proposals and services described herein, as well as any risks associated with such proposal or services. Nothing in this presentation constitutes legal tax or accounting advice. Information contained herein has been obtained from sources believed to be reliable but not guaranteed.
Certain information provided herein is based on third party sources and although believed to be accurate has not been independently verified except as otherwise specified herein. TD Epoch is the source of all information contained in this content. TD Epoch assumes no liability for errors and omissions in the information contained herein. TD Epoch believes the information contained herein is accurate as of the date produced and submitted, but is subject to change. No assurance is made as to its continued accuracy after such date and TD Epoch has no obligation to any recipient of this content to update any of the information provided herein. No portion of this material may be copied, reproduced, republished, or distributed in any way without the express written consent of TD Epoch. Any performance information referenced represents past performance and is not indicative of future returns. There is no guarantee that the investment objectives will be achieved to the extent the material presented contains information about specific companies or securities, including whether they are profitable or not. They are being provided as a means of illustrating our investment thesis. Each security discussed has been selected solely for this purpose and has not been selected on the basis of performance or any performance related criteria. Past references to specific companies or securities are not a complete list of securities selected for clients and not all securities selected for clients in the past year were profitable. The securities discussed herein may not represent an entire portfolio and in the aggregate may only represent a small percentage of a client's holdings. Client's portfolios are actively managed and securities discussed may or may not be held in such portfolios at any given time. Any projections, targets or estimates in this presentation are forward-looking statements and are based on TD Epoch's research analysis and its capital markets assumptions. There can be no assurances that such projections, targets or estimates will occur, and the actual results may be materially different. Additional information about capital markets assumptions is available upon requests. Other events which were not taken into account in formulating such projections, targets or estimates may occur and may significantly affect the returns or performance of any accounts and or funds managed by TD Epoch.
