Energy Sector

[dealraker]

Based on energy market cap to total market cap three years ago I tied on the blindfold and threw darts for a while.  Got a whopping 5% in the game before I stalled out ---  that's of course appreciated to more than that now.  While not buying now I do enjoy some back and forth on the energy/oil/gas world.

 

Best performers for me are OXY and First Solar.  

[StevieV]

2 hours ago, Viking said:

And yes, the world will transition to more green energy sources like nuclear. But it will take a minimum of 5 years or more of hard work to see an impact.

 

I don't know enough to say for sure that more nuclear is the right direction - but that's my guess and I'd like to see more nuclear. That being the case, is there really much of a nuclear push?  Not in the US and lead times in the US would be much, much longer than 5 years.  It would really take a pretty monumental shift in the US for any significant nuclear.

 

Is there big progress on nuclear elsewhere?

[Spekulatius]

4 minutes ago, StevieV said:

 

I don't know enough to say for sure that more nuclear is the right direction - but that's my guess and I'd like to see more nuclear. That being the case, is there really much of a nuclear push?  Not in the US and lead times in the US would be much, much longer than 5 years.  It would really take a pretty monumental shift in the US for any significant nuclear.

 

Is there big progress on nuclear elsewhere?

Except China, the answer is no.

[Sweet]

France is into nuclear, think 70% of electricity is, or was, from nuclear power.

[Viking]

2 hours ago, StevieV said:

 

I don't know enough to say for sure that more nuclear is the right direction - but that's my guess and I'd like to see more nuclear. That being the case, is there really much of a nuclear push?  Not in the US and lead times in the US would be much, much longer than 5 years.  It would really take a pretty monumental shift in the US for any significant nuclear.

 

Is there big progress on nuclear elsewhere?

Oil was over $100 from 2011 to 2015. And the world economy chugged along just fine. I think there is a very good chance we see $150 oil when the global economy starts to normalize in another year or so. We already are seeing that price reflected in gas due to all the refining issues (and spiking differentials). If $150 oil is the new normal for a few years (and it looks like living standards will be coming down) then my guess is politicians/voters will start to become a little more open minded on the energy transition. Nuclear is the obvious choice (green, plentiful, secure etc). The narrative around nuclear is shifting and it will likely pick up steam. Adversity is the mother of invention. 
 

i am very bullish on the economy in North America over the next 5 years. At the same time i think we have high commodity prices and a chronic shortage of labour. Which leads to higher than expected inflation (perhaps 3-4% per year?). 
 

After 2000 (.com crash) what worked for investors changed from the previous decade. After 2008 (housing crash) what worked for investors changed. After 2020/2022 (unprofitable tech/spac/crypto crash) my guess is what works for investors will change again. Today, commodities (especially energy) and financials look best positioned. But i remain open minded. 

Edited November 26, 2022 by Viking

[Viking]

3 hours ago, dealraker said:

Based on energy market cap to total market cap three years ago I tied on the blindfold and threw darts for a while.  Got a whopping 5% in the game before I stalled out ---  that's of course appreciated to more than that now.  While not buying now I do enjoy some back and forth on the energy/oil/gas world.

 

Best performers for me are OXY and First Solar.  

@dealraker good for you. Nice when a plan comes together  Are you buying anything today? Anything (stocks or sectors) you think are cheap and exceptionally well positioned looking out a year or two?

[StevieV]

Thanks Viking.  FWIW, I share your general view on energy.  If energy and financials outperform, and the US economy booms that would all be very much alright with me.

[Spekulatius]

3 hours ago, Sweet said:

France is into nuclear, think 70% of electricity is, or was, from nuclear power.

This is correct, but their nuclear fleet is aging and they will have trouble staying at 70%. I don’t see a positive trajectory here.

[Ulti]

https://www.gpb.org/news/2022/05/09/georgia-nuclear-plants-cost-now-forecast-top-30-billion
 

I live here in Georgia… might be cheaper to keeper 

[dealraker]

16 hours ago, Viking said:

@dealraker good for you. Nice when a plan comes together  Are you buying anything today? Anything (stocks or sectors) you think are cheap and exceptionally well positioned looking out a year or two?

I am aware of anything Viking.

Edited November 27, 2022 by dealraker

[dealraker]

1 hour ago, dealraker said:

Viking my circle of competence is small other than very basic things.  I am good with insurance brokers, insurance underwriters, and banks.  Given that I haven't bought a bank stock exept HOPE since the financial crisis (sold HOPE because it was bought as a group corporate decision and we chose something else) when I bought a tad of BAC.  I've held CATY and EWBC since their IPO.  Insurance brokers---not a bargain and insurance underwriting such as Markel I've sort of moved on from because of loss of interest in the area---although again I've owned Markelsince inception and coutless others such as Fairfax and won't sell.

 

So that basically, for me, leaves sectors.  Parsad is thinking positive obviously on META and GOOG...I'm more cautious which means of course that he is correct!!!   But there's nothing out there that I know these days- like Charlie "I have nothing to add."  LOL.  But like most I'll leave my slight bias: I think energy is still probably, even with lack of moats, a place to get a decent return for the next 10-20 years.  Read: Warren Buffett ain't buyin' fer no short term thingy.

Whoops!  Forgot to mention I did buy some JOE.  I think they may just finally-finally-finally pull it off with on-going revenue and such that there's something left over for shareholders.  In any event, now I get to chat and rant with Greg on JOE!

Edited November 27, 2022 by dealraker

[SharperDingaan]

Much as Viking states, we are also very bullish on NA. We just think it will be 5-10 years+ and include introduction of a new industrial revolution (payments, blockchain, robotics, EV, infrastructure replacement, return to space, etc.) - and an almost endless list of innovation.

 

Everyone steals IP from the Americans for a reason - it's truly game changing, original, and it works. However ever since the start of the GFC - the last decade+ of economic focus has had to be on the avoidance of a global depression that took us back to the 1930's or worse. The Fed put, QE, helicopter money, negative interest rates, etc., were not 'normal'. Rapid rises in global interest rates to counter inflation, evidence that it is now done, and that we are entering a new world.

 

Nukes are great, so long as you can reliably and permanently dispose of the waste. With the now reliable rocketry, and the load capacity to fire that waste into the sun, one can instantly unblock a lot of the current bottlenecks. Base load power to supply EV, wind/solar/hydrogen via battery, o/g as the transition fuels. 5-10 years to become noticeable, but it IS coming.

 

The NA grid power has to be rebuilt, payments/banking upgraded to CBDC, blockchain integration begun on the operations of most all businesses. We aren't there yet, but again it IS coming, and sooner vs later.

 

Hard to find a better place than NA to be in.

 

SD

 

Edited November 28, 2022 by SharperDingaan

[UK]

https://www.economist.com/the-americas/2022/11/27/president-joe-biden-starts-to-lift-sanctions-on-venezuela

 

Venezuela sits on 18% of the world’s proven oil reserves, more than any other country. The war in Ukraine has made everyone more nervous about oil supplies, and therefore made the cost of isolating Venezuela seem higher. After decades of mismanagement Venezuela’s oil industry is too run-down to make much difference to global oil markets in the short term, but America and others are thinking about the long term.

[JRM]

16 minutes ago, SharperDingaan said:

Nukes are great, so long as you can reliably and permanently dispose of the waste. With the now reliable rocketry, and the load capacity to fire that waste into the sun, one can instantly unblock a lot of the current bottlenecks. Base load power to supply EV, wind/solar/hydrogen via battery, o/g as the transition fuels. 5-10 years to become noticeable, but it IS coming.

 

 

lmao, launch nuclear waste into the sun?  do you know that one of the largest sources of untapped energy in the US is sitting in spent fuel pools throughout the country?  If the US would reprocess spent fuel it would reduce waste and reduce the half life of the remaining waste.  Thank President Carter for his concerns.

[Sweet]

Yeh, we want to keep that nuclear waste, it’s potentially very valuable in the future.

[SharperDingaan]

No one is going to touch a spent fuel pool - simply because the fuel is already 'disposed'. But in the 'new' world of ESG, most would argue no new nukes without new and reliable permanent disposal, for less than the cost of simply firing it into the sun. 

 

SD

 

[Gregmal]

5 hours ago, UK said:

https://www.economist.com/the-americas/2022/11/27/president-joe-biden-starts-to-lift-sanctions-on-venezuela

 

Venezuela sits on 18% of the world’s proven oil reserves, more than any other country. The war in Ukraine has made everyone more nervous about oil supplies, and therefore made the cost of isolating Venezuela seem higher. After decades of mismanagement Venezuela’s oil industry is too run-down to make much difference to global oil markets in the short term, but America and others are thinking about the long term.

Remember in school there were the goody two shoe kids, and polo shirt wearing crowd, who all had their cliques, but also had a couple friends where you scratched your head and thought, WTF? Then you got older and wiser and realized those were the ones who got them weed or picked up cigarettes and kegs for the parties. Russia used to be that for us, now someone else will fill the role. We never do our own dirty work. We can be woke and have energy purchased from terrorists and dictators all at the same time.

[Sweet]

Depends how and where it is disposed of SD.  In Switzerland, 45 years worth of spent fuel is sitting in this facility:

 

 

That’s the entire waste from 45 years in view I understand.

 

 

Edited November 27, 2022 by Sweet

[JRM]

1 hour ago, Sweet said:

Yeh, we want to keep that nuclear waste, it’s potentially very valuable in the future.

 

27 minutes ago, SharperDingaan said:

No one is going to touch a spent fuel pool - simply because the fuel is already 'disposed'. But in the 'new' world of ESG, most would argue no new nukes without new and reliable permanent disposal, for less than the cost of simply firing it into the sun. 

 

 

I'm not trying to be a smart ass here, but the solution has been around for a while.  The US just doesn't have the appetite for reprocessing spent fuel.  The logic is the same as what shut down Yucca Mountain, even though its flawed logic.  The concerns are related to transporting spent fuel assemblies via the highway system, which guess what, isn't much riskier than transporting new fuel assemblies.  Too many people just don't know what they're talking about.  

 

Other countries already do this.  Its a hell of a lot safer than strapping a bunch of fuel assemblies to a rocket and hoping it doesn't explode in our atmosphere.

 

I'm not sure if you're confusing fuel used in submarines, but the spent fuel sitting in spent fuel pools isn't "untouchable" as you describe.  A lot of times "spent fuel" is rotated from back into the reactor with new fuel assemblies.  Reprocessed fuel can be reused as "new" fuel, which is why spent fuel pools are one of the largest sources of energy in the US behind coal and natural gas.

 

I'm pro nuclear, pro reprocessing, and pro shooting crap into the sun.  I'm just saying that's not going to happen any time soon.

 

 

[Stuart D]

33 minutes ago, Gregmal said:

Remember in school there were the goody two shoe kids, and polo shirt wearing crowd, who all had their cliques, but also had a couple friends where you scratched your head and thought, WTF? Then you got older and wiser and realized those were the ones who got them weed or picked up cigarettes and kegs for the parties. Russia used to be that for us, now someone else will fill the role. We never do our own dirty work. We can be woke and have energy purchased from terrorists and dictators all at the same time.

Best analogy ever

[Spekulatius]

Most crude is produced by dictatorship countries - Saudi Arabia, Iran, Russia, Venezuela, Irak, Kuwait etc. That’s just the way it is and has nothing to be with woke. The world as a whole has no choice to buy it from whoever has the resources.

The US is energy self sufficient as whole but that does not protect consumers here from high prices, at least not for products where prices are set by global markets.

Edited November 27, 2022 by Spekulatius

[SharperDingaan]

Thing is, it is not just the fuel and/or its recycling/disposal. It's also the materials of the reactors themselves, and the associated pumps/equipment - the 20-30 years to fully decommission a plant, which might have a 40 year working life. Folks laugh at the space solution, but in many cases an entire decommissioned small nuke can be disassembled enough to fit into 1-2 cargo bays, and disposed of both cleanly and entirely. Relatively straightforward for a SpaceX to prove the concept, and thereafter commercialize it.

 

New and better solutions for new times.

 

SD

 

 

 

 

 

[JRM]

8 hours ago, SharperDingaan said:

Relatively straightforward for a SpaceX to prove the concept, and thereafter commercialize it.

 

My advice would be to stop listening to people like Elon and talk to more engineers\scientists\physicists.  

 

I have no idea what launching a 500 ton reactor vessel into space has to do with reprocessing spent fuel. 

 

This discussion is off the rails, so back to the thread...

[Spekulatius]

31 minutes ago, JRM said:

 

My advice would be to stop listening to people like Elon and talk to more engineers\scientists\physicists.  

 

I have no idea what launching a 500 ton reactor vessel into space has to do with reprocessing spent fuel. 

 

This discussion is off the rails, so back to the thread...

What is the cost/kg to move payload  out of the earth gravity field (which is way higher than moving it into the near earth orbit)?

 

What happens when one of the payloads crashes or even worse explodes in the atmosphere due to rocket failure?

 

It is way safer and cheaper to burry it underground in a geological nonactive and remote area.

[mattee2264]

2022 oil price gains now erased as markets start to worry about zero COVID policy in China with cases starting to rise. The adage is oil stocks are for trading not holding but I think supply tightness will still dominate so continuing to hold