Energy Sector

[Castanza]

1 hour ago, SharperDingaan said:

European solar is typically urban rooftop application; the European 'solar farm' just has people living under the solar panels. Power generated/used at source, offsetting line-loss from a central farm (US approach). Windmills in the rural areas are an increasingly common sight, and they often double as cell phone towers. Unit costs are dramatically falling as manufacturing scales up, & it is still early stages.

 

In the ESG world, nukes are right up there with dirty oil. Oil harms when you process and burn it. Nukes harm when you dispose of the waste. In both cases if something goes wrong people die - but with nukes the pollution lives on for multiple lifetimes. Obviously, the more alternative clean energy you can generate (and the less oil/nuke) the better.

 

SD

 

I don't see how the last part is "obvious" regarding nuclear, since it historically is the safest energy we have. Even stacked up against solar and wind it kills less people per unit of energy created. Or were you referring to the view of ESG crowd? 

[Spekulatius]

The argument for nuclear will not be won with arguments, but I think if we get the first widespread power outage, it may cause a shift in perception. Even those that don't like nuclear power probably like sitting in the dark and cold even less.

 

Germany is a small country area wise and it is possible that both wind and solar would get much lower output at the same time. Even when connected in an European power net, i am not sure where the supply security comes from using only alternative energy and russian gas.

 

Well, Germany has a lot of lignite coal if push comes to shove, but I don't think it was in the LT plan to put coal wheezers back to supply the electricity baseload.

 

The French will be building reactors probably close to the German borders because that's where the rivers are, so it's not like exposure can be avoided anyways, if you afraid of these things.

[Castanza]

2 minutes ago, Spekulatius said:

The argument for nuclear will not be won with arguments, but I think if we get the first widespread power outage, it may cause a shift in perception. Even those that don't like nuclear power probably like sitting in the dark and cold even less.

 

Germany is a small country area wise and it is possible that both wind and solar would get much lower output at the same time. Even when connected in an European power net, i am not sure where the supply security comes from using only alternative energy and russian gas.

 

Well, Germany has a lot of lignite coal if push comes to shove, but I don't think it was in the LT plan to put coal wheezers back to supply the electricity baseload.

 

The French will be building reactors probably close to the German borders because that's where the rivers are, so it's not like exposure can be avoided anyways, if you afraid of these things.

 

That's a good point about adoption and you're probably correct. Although If memory servers me right, Germany had some power issues last year and still doubled down on shuttering nuclear. I was thinking the same thing about your last point. Half the EU countries are equivalent to states in the US. Whether to or not to use nuclear is a global decision which as of now is unlikely. 

 

Either way, I guess this discussion is fruitless since investing in nuclear is moot and everything renewable is sky high. Plus by the time nuclear gets adopted (if it does), I'll either be dead or it will be some new tech which uses different resources which make long term investments from here almost impossible. 

 

@SharperDingaan appreciate your responses though as you always have unique perspectives. 

[rkbabang]

13 minutes ago, Spekulatius said:

The argument for nuclear will not be won with arguments, but I think if we get the first widespread power outage, it may cause a shift in perception. Even those that don't like nuclear power probably like sitting in the dark and cold even less.

 

Germany is a small country area wise and it is possible that both wind and solar would get much lower output at the same time. Even when connected in an European power net, i am not sure where the supply security comes from using only alternative energy and russian gas.

 

Well, Germany has a lot of lignite coal if push comes to shove, but I don't think it was in the LT plan to put coal wheezers back to supply the electricity baseload.

 

The French will be building reactors probably close to the German borders because that's where the rivers are, so it's not like exposure can be avoided anyways, if you afraid of these things.

 

 

It depends on the people.  Californians seem to be happy with rolling blackouts on hot days.  I don't see anyone screaming for nuclear plants there.  It seems that people will happily sit in the dark and sweat(or freeze depending on location), before they will change their minds.  Reminds me of the old joke: What did socialists use before candles?  Electricity.

 

[SharperDingaan]

View of the ESG crowd.

 

A toxic screw-up (melt-down, contamination, etc.) is still toxic - no matter how remote the probability. Hence the best nuke is the one that is never built, the best O/G is that left in the ground, 100% renewables is better than 50%. While it is understood that 100% renewables is not practical (when the sun don't shine, or the wind blow), the non-renewable still has to be minimally toxic. Safety/KW generated is meaningless, as every survivor who lived next to Fukushima or Chernobyl knows.       

 

It is just a population choosing to live and get its energy a different way. Alien by many NA standards, but a quite practical PoV to the many Europeans who live there, and their younger generations.

 

SD

 

[Castanza]

21 minutes ago, SharperDingaan said:

View of the ESG crowd.

 

A toxic screw-up (melt-down, contamination, etc.) is still toxic - no matter how remote the probability. Hence the best nuke is the one that is never built, the best O/G is that left in the ground, 100% renewables is better than 50%. While it is understood that 100% renewables is not practical (when the sun don't shine, or the wind blow), the non-renewable still has to be minimally toxic. Safety/KW generated is meaningless, as every survivor who lived next to Fukushima or Chernobyl knows.       

 

It is just a population choosing to live and get its energy a different way. Alien by many NA standards, but a quite practical PoV to the many Europeans who live there, and their younger generations.

 

SD

 

 

More people died from being evacuated at Fukushima than from any type of radiation. As for Chernobyl estimates are all over the map. Both of these were terrible designs and one was run by a terrible government that had basically zero oversight. The Safety/HW generated includes those numbers as far as I'm aware.

 

https://en.wikipedia.org/wiki/List_of_nuclear_and_radiation_accidents_by_death_toll

 

Add in  better planning, better oversight, modern designs and nuclear is very attractive. Some modern designs also have easy to dispose of, short half life, or very little waste (thorium). 

 

I don't often say this, but China is smart by pushing nuclear. Could they F it up? Maybe, CCP worries me but one thing they seem to be good at in the past 50 years is skating to where the puck is going and not where it is. 

[Spekulatius]

2 hours ago, rkbabang said:

 

 

It depends on the people.  Californians seem to be happy with rolling blackouts on hot days.  I don't see anyone screaming for nuclear plants there.  It seems that people will happily sit in the dark and sweat(or freeze depending on location), before they will change their minds.  Reminds me of the old joke: What did socialists use before candles?  Electricity.

 

I think the last round of blackouts was caused by preventive wildfire related switch offs from part of the grid, which is a consequence of the issues PG&E was having with wildfire liabilities (not that they don't share some blame).

 

I was in CA during the rolling blackouts caused by Enron gaming the electricity supply and it was no fun. The company I worked for lost hundred of thousands $ in some cases when the power was turned off without sufficient warning ( most of the time we got a 1h warning but sometimes not). Lot's of production batches were lost, some could be saved, but it was always a gamble. Fun times, especially with a simultaneous hit from the recession that was building up (pre 9/11).

Edited January 4, 2022 by Spekulatius

[cubsfan]

^ The middle class and poor in the Central Valley of CA get killed by this stuff. It's not so bad when

you live in the Bay Area or Coastal corridor where you hardly need an air conditioner.  

 

So yeah, the elites on the Coast don't suffer much - but the poor get dump on.

No problem for the policy makers like Newsome, etc if the rest of the folks are forced to pay the highest electricity rates in the country while they push their green new deal BS.

Edited January 4, 2022 by cubsfan

[StevieV]

18 hours ago, rkbabang said:

 

 

It depends on the people.  Californians seem to be happy with rolling blackouts on hot days.  I don't see anyone screaming for nuclear plants there.  It seems that people will happily sit in the dark and sweat(or freeze depending on location), before they will change their minds.  Reminds me of the old joke: What did socialists use before candles?  Electricity.

 

 

"Californians seem to be happy with rolling blackouts on hot days." - California is #5 on the list of states people are moving from.  It used to be a state people would move to and now it is a state people move from.  Most of the other states that top the "moving out" list are cold weather states.  I don't think energy is the #1 issue, but I don't think that all Californians are so happy with the state.

18 hours ago, SharperDingaan said:

View of the ESG crowd.

 

A toxic screw-up (melt-down, contamination, etc.) is still toxic - no matter how remote the probability. Hence the best nuke is the one that is never built, the best O/G is that left in the ground, 100% renewables is better than 50%. While it is understood that 100% renewables is not practical (when the sun don't shine, or the wind blow), the non-renewable still has to be minimally toxic. Safety/KW generated is meaningless, as every survivor who lived next to Fukushima or Chernobyl knows.       

 

It is just a population choosing to live and get its energy a different way. Alien by many NA standards, but a quite practical PoV to the many Europeans who live there, and their younger generations.

 

SD

 

 

This dramatically underplays the limitations of renewables, especially if when you talk about renewables you mean wind and solar.  Also seems to dismiss or downplay the externalities of energy sources other than nuclear.

[SharperDingaan]

"This dramatically underplays the limitations of renewables, especially if when you talk about renewables you mean wind and solar.  Also seems to dismiss or downplay the externalities of energy sources other than nuclear."

 

It's just a different perception ....

 

Over time, technical limitations get resolved. Batteries/storage get better/cheaper, generation/delivery efficiencies get better, cap cost/iKw declines as scale ramps up. Relative to most other power generation, decommissioned (& removed) green tech equipment is pretty benign. 

 

There IS a need for power stations to add resiliency, but the preference is clearly gas over coal, and they are for standby - not base load. Again, decommissioned (& removed) gas fueled power generation equipment is pretty benign ... coal not so much. Hence, if you can afford it, the standby fuel is gas, hydrogen, methane, methyl hydrates, etc..

 

There is also a need for nukes, and updated power grids to feed the rapidly growing base-load EV requirement. New designs, improved safety, lower cost/kw, etc. are handicapped by the legacy of large numbers of old plant/design. Decommissioning is expensive, and is that old site really safe 'forever' (what did you the waste buildings, handling equipment?), if 50-100 yrs out nobody is monitoring it any more? If there is no social license, those new nukes aren't going to be built. Hence the best nuke is a NEW high-capacity nuke, someplace where there AREN'T any others.

 

Ultimately, local societies decide what they think works best for them, and different societies will have different solutions.

 

SD    

 

Edited January 5, 2022 by SharperDingaan

[Viking]

What to do when energy costs spike? If you are an energy company in the UK you send your customers a pair of socks so they can stay warm. Another suggested customers cuddle a pet or do jumping jacks. Now i know Brits are different ducks… but really? 

 

Energy markets are VERY messed up right now. Especially Europe. We are just starting to see the consequences of decisions made the past 6 years or so on the energy front. But energy policy is now religion - no place for logic… it is all about what you believe. Where do energy prices go in 2022? My guess is socks, pets or jumping jacks are not going to solve any of the root problems…

—————

E.ON says sorry for sending socks to customers with advice to keep warm

- Energy supplier sent pairs to 30,000 households with advice on turning down heating to cut carbon footprint

- Many of the new E.ON Next sock owners took to social media to criticise the “pitiful package”, which was delivered to homes in the same week that Ovo Energy was forced to apologise for a customer letter urging households to cuddle a pet or perform star jumps to keep warm.

- The apology comes days after Stephen Fitzpatrick, the boss of Ovo Energy, which bought SSE’s supply business two years ago, was forced to apologise for a “ridiculous” email that urged customers to enjoy “hearty bowls of porridge” or a “hula hoop contest” to help stay warm this winter.

 

https://www.theguardian.com/business/2022/jan/14/eon-says-sorry-for-sending-socks-to-customers-with-advice-to-keep-warm

 

Edited January 14, 2022 by Viking

[Gregmal]

You get what you vote for. If you disagree with the policy it’s easy to utilize logic to make money off its insanity. Then you happily pay your heating bill with profits from the whole ordeal. Quite simple. Even good ole copper is crushing it right now. 
 

No where are they more deserving of this than the EU. Good riddance. 

[Viking]

5 minutes ago, Gregmal said:

You get what you vote for. If you disagree with the policy it’s easy to utilize logic to make money off its insanity. Then you happily pay your heating bill with profits from the whole ordeal. Quite simple. Even good ole copper is crushing it right now. 
 

No where are they more deserving of this than the EU. Good riddance. 

That is similar to the approach i take with family members who complain about banking fees or the cost of their cell plan… i tell them to buy banks or the cell providers and make $ on the other side (that whole Munger invert thing). But they refuse. And keep complaining… 

Edited January 14, 2022 by Viking

[Thrifty3000]

17 hours ago, Gregmal said:

You get what you vote for. If you disagree with the policy it’s easy to utilize logic to make money off its insanity. Then you happily pay your heating bill with profits from the whole ordeal. Quite simple. Even good ole copper is crushing it right now. 
 

No where are they more deserving of this than the EU. Good riddance. 

I have a stingy friend who refinanced his mortgage via JP Morgan, and then he turned around and bought a bunch of JPM stock when it was cheap because he wanted to feel like JPM was paying for his house.

[Gregmal]

Will be interesting to see if there’s any implications from the volcano within the energy space. Or if Gavin or Letitia decide they need to sue the volcano for contributing to climate change. Once again authorizes are promoting masks. This time it’s just a suggestion though. Only heavy smoke and ash in the air. Wonder who is the dominant strain in the smoke/ash vs COVID turf war. Or do we get a mega variant when they merge? Smogricon variant? #tailrisks
 

https://www.bloomberg.com/news/articles/2022-01-15/tonga-issues-tsunami-warning-after-undersea-volcano-erupts

[james22]

Always entertaining.

[lnofeisone]

Found this somewhat interesting. ET reported their quarterly results (I'm long and underwater). Good quarter. It looks like E&P are prioritizing debt reduction, share buyback, dividend (CVE, VET, etc.) and pipelines (ET, EPD) are prioritizing distribution, debt reduction and buyback. I realize that these two aren't exactly comparable but fascinating divergence in strategies for FCF.

[Gregmal]

Brandon now looking to ban oil from Russia. Still shockingly not encouraging drilling on American soil either. I just filled my 550 gallon home heating tank even though winter in NJ is basically done. Better hedge than waiting. Full price 3.97 per gallon up from 2.65 in December. $200 a barrel may be much closer than people realize. 

[DooDiligence]

2 minutes ago, Gregmal said:

Brandon now looking to ban oil from Russia. Still shockingly not encouraging drilling on American soil either. I just filled my 550 gallon home heating tank even though winter in NJ is basically done. Better hedge than waiting. Full price 3.97 per gallon up from 2.65 in December. $200 a barrel may be much closer than people realize. 

 

Who is Brandon?

[Gregmal]

My best friend right now.

 

https://seekingalpha.com/amp/news/3807360-devon-energy-ceo-mystified-that-biden-has-not-asked-for-more-oil-output

[lnofeisone]

We only get something like 20M barrels of oil from Russia a year (which is about 1 day worth of consumption for us) - funny ramification of Jones Act. So this would be a very tiny amount and amounts to a symbolic gesture unless bigger players around the world will also start refusing oil deliveries due to financial sanctions/ being concerned that they would inadvertently end up on the sanctions list.

[Gregmal]

4 minutes ago, lnofeisone said:

We only get something like 20M barrels of oil from Russia a year (which is about 1 day worth of consumption for us) - funny ramification of Jones Act. So this would be a very tiny amount and amounts to a symbolic gesture unless bigger players around the world will also start refusing oil deliveries due to financial sanctions/ being concerned that they would inadvertently end up on the sanctions list.

People also said US stigmatizing drilling here at home wouldn’t have meaningful impact on prices either. So while small, these measures encourage traders and speculators to force the hand which then creates imbalance which then encourages more hoarding and speculation ultimately pressing the issue til somebody can demonstrate there’s no longer money to be made from taking such a position. I don’t even think we re at the oh shit phase of the energy crisis yet. People still think it’s temporary. How you solve it? Change the narrative and encourage the shit out of producers to drill baby drill. How you make it worse? Basically everything Brandon’s doing. 
 

 

[fareastwarriors]

32 minutes ago, Gregmal said:

My best friend right now.

 

https://seekingalpha.com/amp/news/3807360-devon-energy-ceo-mystified-that-biden-has-not-asked-for-more-oil-output

 

Even if the President calls Mr. Devon CEO and ask him to please increase output. Does it really Matter? Shareholders were burned badly last time around and they Want capital discipline (at least for now), Lenders and bond market too. Big shareholders probably have more power than the President here. It's not like Mr CEO can just turn the tap more and more oil comes out...

 

Edited March 2, 2022 by fareastwarriors

[lnofeisone]

Definitely agree on both and long O&G. My sell signal is shift to drill baby drill. End of the war alone will just keep things as-is and it is still wildly profitable for O&G. 

[rkbabang]

36 minutes ago, DooDiligence said:

 

Who is Brandon?

 

An old guy bureaucrat with dementia who is in far far over his head.