Well needless to say I think most content of the last 3 posts are wrong.
I'll TRY to make this as short as possible
...and just address pertinent items:
1)
One needs to keep in mind that just as for the various fossil fuels there are renewable lobbies.
Next you will be telling me that the Boy Scouts have lobbyists
The Boy Scouts DO have lobbyists....as well as renewable energy. Personally....I hate ALL LOBBYISTS. Although...if it weren't for FOX News....many of them would be out of work
2) "I TOTALLY agree with the
SENTIMENT of the Citigroup regarding oil vs renewables."
Agreeing with the
SENTIMENT....does NOT mean that I agree with its details. Those are very different animals. Do I see $10 oil? Certainly not. Would $10 oil "crimp" renewable? Certainly it would effect it. But oil is "loosing its luster". And now companies are looking DOWN THE ROAD...now that the "picture" of that road is coming more clearly into focus. And that focus means that fossil fuels need to "go away". Change is difficult. The "free market" (well...mostly free) will help push it out the door.
3) Subsidies: I would LOVE to see ALL subsidies go away. But the
OIL AND GAS INDUSTRY WOULD NEVER GO FOR THAT. They are the LARGEST recipient of incentives and subsides by a LARGE MARGIN. Some folks are calling for "subsidies" for renewable to go away....but the people pushing for those incentives to go away DON'T want the fossil fuel incentives to go away. I wonder why?
Small companies (
) like Walmart and Google don't HAVE to install solar. They are choosing to. A large part of that calculation is cost...both current and
future.
4) Coal was the "most obvious" of three primary fossil fuels to get hit first...and it will still take a LONG WHILE to play out (many decades). Oil is the second in line to get hit...and natural gas will be the last to get hit. I am actually VERY BULLISH on natural gas as an investment over the next 5 - 20 years as LNG EXPORT facilities come on line in the US. Supply and demand. I think it is crappy for the environment...but as an investment, the next decade or two certainly looks good for nat gas. You see....I'm not a lobbyist.
Before....it didn't make a lot of sense to use electric cars....because you were charging them up with electricity produced by coal plants. That...is quickly being replaced by both nat gas and renewables as coal's portion of the energy pie continues to drop. Coal is the red-headed step child (my apologies if you are a red head like me
). The other two will take longer to go the way of the dodo bird....but their day (or decade) is coming further on down the road.
5)
This idea that Exxon and other oil companies are going to go bankrupt or something is nonsense in any near term time frame.
There will be MANY BANKRUPTIES of small and perhaps some intermediate sized O & G companies in the next few years. The "marginal players" have too much debt on their books they have to service. Remember...they were drilling when price was $100....and now its $40. Something tells me their spreadsheet "pro forma's" are not looking so great. And that is why they will continue to pump....because they don't have the financial wherewithal to pull back once they have their "sunk costs" (fixed costs) in the ground. As long as their marginal cost is less than the price...they will keep pumping. But nobody that I know...thinks that EXXON is going into bankruptcy anytime soon. Maybe you have been watching too much FOX News? I know....."fair and balanced."....
4)
Oil in general does not compete with renewables and there is no doubt that over the last 6 months oil has gained on renewables
You can't have it both ways. Either it is competing or it is not competing. Which is it? They all play in the same large pool.....maybe different parts of it....but it is ALL INTERRLATED in some way.
5)
The big investors in this are not stupid and they will milk all the return on investment they can for as long as they can.
Oh...so they are smart executives the likes of which were at: Blockbuster, Wang Computer, WorldCom, American Airlines, Enron, General Motors, etc....etc....etc.... That makes me feel a LOT better
The financial history is littered with a LOT of "smart people"......that were short on wisdom. Ego can be blinding....and especially with a company with HIGH FIXED COSTS and a lot of debt....it isn't easy to "turn on a dime." I think many of them have already MISSED THAT OPPORTUNITY....
6)
Divestiture has zero impact on any energy company as there are innumerable deep pocket investors who will provide capital as long as the returns are in line with what rent they are seeking.
a) I did NOT realize that the universe of deep pocket investors was endless.
b) Prices are set by the INCREMENTAL investor. Take some of the investors away....and you bring down the price of the equity or debt. There IS an effect. And that effect will be on their "cost of capital" (debt). It will increase slightly over time.
7)
Some of the 'other' side effects are a deep drop in energy available per capita and the devastating impact that will have on the level of civilization we can put on the field
.
WOW. You must have been watching an Al Gore horror flick:) Full disclosure...I'm
NOT an Al Gore fan.
Two things: (a) First....the energy available per capita WILL BE DROPPING.... IT IS HAPPENING NOW because of
efficiency in all areas of energy (car mileage....building insulation...improved solar....improved wind....nat gas rather than coal....lighting costs dropping....etc..etc). EVERYWHERE. We're going to CONTINUE to drop the amount of energy WE NEED PER CAPITA....so we NEED LESS ENERGY PER CAPITA. That is a GOOD THING.
(b) I think the "level of civilization" will be just fine (whatever you mean by level of civilization). I have a "news flash" for you: The "level of civilization" is on a LONG ROAD UP. We have a LONG WAY TO GO...but very good prospects. Once we get rid of people and companies that lie for a living (FOX News...Bill O'Reilly....Sean Hannity....Tony Watts....most lobbyists...etc)....I think the prospects are VERY GOOD INDEED.
Costs of renewables, which are much higher than the lobbies talk about or acknowledge, will perhaps be less than the total of fossil fuels all right. But we are used to not counting the external costs and in shear capacity to do work the fossil fuels cannot be matched.
Cost of renewables continues to drop like a stone. Germany produced 78% of their energy for one day a few weeks ago. And this is GERMANY.....think Seattle....not the sunniest place in the world. With every passing day, more and more places will be able to "replace" fossil fuels. But it WON'T happen over night.
9)
I think that when you analyze the impacts in totality of the loss of fossil fuels that there will be a very strong net negative in terms of increasing death rates, declining overall quality of health, less capacity to maintain current lifestyles
I could say something like..."you've got to be kidding"....."are you saying that with a straight face"...or...."what oil and gas company did you say you work for".....but I won't. Instead...you can look up the GAZILLIONS of research articles that show just how bad vehicle emissions are for people. Or....better yet....go visit Beaumont, Texas sometime. You'll smell it before you even get to the city limits. In Texas they say..."
if you like benzene....you'll love Beaumont."
http://scienceblogs.com/thepumphandle/2014/12/17/study-reduced-emissions-from-electric-cars-could-prevent-thousands-of-deaths/http://www.eesi.org/articles/view/new-research-documents-frackings-health-effects-on-workers-and-communitieshttp://www2.epa.gov/air-research/near-source-air-pollution-research10
The declining global financial situation (basically setting up to repeat a lot of the 2009 debacle) severely constrains the ability of governments all over the world to make the renewable transition. Ignoring external costs (which is still going to be the norm for a long time)
There is no "repeat of the 2009 debacle". The last debacle, in large part, was because of too much leverage in the system (investment banks talked the Bush administration to allow change the system to allow them to leverage WAY TOO MUCH...in combination with other factors that caused too much leverage in other places like homebuying...car buying..etc). The only "debacle" now...is China...which is a mess. The US is actually doing pretty well....considering we are recovering from an almost total meltdown of the banking system in 2008.
11)
I note that there seems to be a sense of competition towards what I have been saying by a number of folks.
Discussions are NOT competitions. People HAVE different opinions. Some of those opinions will END UP being CLOSER TO REALITY....and some won't. And we won't KNOW until "later on."
The "tipping point" on renewable energy is now BEHIND US. Now....we will be in an era of INCREASED MOMENTUM of that sea change. There will be MANY companies that prosper....and many (old line) companies that fail. That is the way that change works.
Humanity has such a LONG WAY TO GO. We have just BARELY begun to tap into things that will change our lives for the better. Using the sun and wind......is just ONE of the major changes that is now taking place.
Combine that with changes that will be coming in COMMUNICATION, HUMAN PSYCHOLOGY, ACCOUTABILITY (are you listening FOX News?), and other areas.......I am REALLY bullish.
BUT....we (humans) have to realize that the QUICKER WE GET AWAY FROM FOSSIL FUELS....the better off we will be FROM A HEALTH STANDPOINT....AND....FROM A COST STANDPOINT.
There are only 2 things that we do with our "waking hours": (1) make decisions, and (2) execute on decisions. In order to make GOOD DECISIONS....we need (a) good information, (b) good communication, (c) accountability, and most importantly (d) good people. And that certainly applies to decisions "we" are making about the move away from fossil fuels.