Shorting Oil, Hedging Tesla

[TheTalkingMule]

I do agree that things are moving in the right direction but just not quick enough. And the more I learn about this, the more I realize that we (the world) don't want to compromise anything about "our way of life" (more energy consumption) unless everybody loses.

This flawed logic is part of the problem. It's not about compromising our way of life, it's a transition to something far better. Paying Tesla to put solar on my roof, a battery in my garage and a Model 3 in my driveway takes nearly all fossil fuels out of my life, saves me money, provides more resilient home energy delivery, and dramatically improves my personal transport performance. Where exactly is my sacrifice? That narrative of zero-sum sacrifice is born out of utility talking points and reinforced by hippies. In reality we're headed to an era of unprecedented abundance.

Decentralized renewable energy will supplant oil&gas when everyday people decide so en masse. It's looking like the fastest way to do that is allowing legacy fossil interests to push them in the wrong direction then letting people push back. A similar path to how sexual harassment was ended in the first year of this Administration. I'm fairly upbeat on 2018.

 

[adiggs]

This flawed logic is part of the problem. It's not about compromising our way of life, it's a transition to something far better. Paying Tesla to put solar on my roof, a battery in my garage and a Model 3 in my driveway takes nearly all fossil fuels out of my life, saves me money, provides more resilient home energy delivery, and dramatically improves my personal transport performance. Where exactly is my sacrifice? That narrative of zero-sum sacrifice is born out of utility talking points and reinforced by hippies. In reality we're headed to an era of unprecedented abundance.

Decentralized renewable energy will supplant oil&gas when everyday people decide so en masse. It's looking like the fastest way to do that is allowing legacy fossil interests to push them in the wrong direction then letting people push back. A similar path to how sexual harassment was ended in the first year of this Administration. I'm fairly upbeat on 2018.

Thumbs up! I've been busy writing a much longer, less pithy attempt, at articulating this same idea.

I don't know if it'll happen fast enough or not, but at a micro scale, we can each be evaluating for ourselves today, whether it's time to begin making the switch and sacrifice. My 'sacrifice' is remarkably easy to make

 

[dc_h]

This flawed logic is part of the problem. It's not about compromising our way of life, it's a transition to something far better. Paying Tesla to put solar on my roof, a battery in my garage and a Model 3 in my driveway takes nearly all fossil fuels out of my life, saves me money, provides more resilient home energy delivery, and dramatically improves my personal transport performance. Where exactly is my sacrifice? That narrative of zero-sum sacrifice is born out of utility talking points and reinforced by hippies. In reality we're headed to an era of unprecedented abundance.

Decentralized renewable energy will supplant oil&gas when everyday people decide so en masse. It's looking like the fastest way to do that is allowing legacy fossil interests to push them in the wrong direction then letting people push back. A similar path to how sexual harassment was ended in the first year of this Administration. I'm fairly upbeat on 2018.

Right on! Hair shirt hippies are not going to save the planet. Scientists and innovators and early adopters will be our salvation.

 

[jhm]

I highly recommend this (frightening) meta-analysis These 'missing charts' may change the way you think about fossil fuel addiction

I can't imagine a scenario where things go right. Even if Tesla gets all the capital and ressources it needs, the situation is deteriorating too fast. I'm a huge Tesla supporter, but the crisis that's bound to happen will disrupt Tesla like any other organization/institution.

At this pace, innovation in EV and solar energy won't cut it.

Thanks for posting this. The author is taking a skeptical view of the data, which I believe is well deserved. Particularly this risk of under reporting warrants concern.

The author is, however, overlooking BP's estimate of CO2 emissions from energy sources. Many countries are attempting to switch to lower emissions fuel, coal to natural gas mostly. While I am concerned about a long term lock-in of gas, in the short run this switch should be slowing growth in carbon emissions even as total consumption of fossil fuels rise. So the estimate of carbon emissions is supposed to track this. The author fails to report that this estimate has been flat for the last three years, suggesting that we may be at a peak in emissions from fossil fuels. This fact does not seem to support the aithor's thesis. But had he reported it, he could still claim that it was subject to insert reporting errors.

So what really is the arbiter here? I agree with the author that measurement of atmospheric CO2 levels is our best yard stick for measuring progress in curbing emissions. It is comprehensive across all sources of emission, and is certainly not fooled by bad accounting elsewhere. Moreover, atmospheric CO2 is what physically impacts climate change. The disadvantage are that we cannot separate different sources humans and natural, and it is a bit noisy.

So here are actual estimates of annual change in atmospheric CO2 as measured at the Mauna Loa Observatory. The second column is the increase in ppm.

 year     ann inc         unc
  1959        0.94        0.11
  1960        0.54        0.11
  1961        0.95        0.11
  1962        0.64        0.11
  1963        0.71        0.11
  1964        0.28        0.11
  1965        1.02        0.11
  1966        1.24        0.11
  1967        0.74        0.11
  1968        1.03        0.11
  1969        1.31        0.11
  1970        1.06        0.11
  1971        0.84        0.11
  1972        1.69        0.11
  1973        1.22        0.11
  1974        0.81        0.11
  1975        1.09        0.11
  1976        0.81        0.11
  1977        2.16        0.11
  1978        1.31        0.11
  1979        1.79        0.11
  1980        1.68        0.11
  1981        1.43        0.11
  1982        0.99        0.11
  1983        2.10        0.11
  1984        1.40        0.11
  1985        1.26        0.11
  1986        1.48        0.11
  1987        2.20        0.11
  1988        2.16        0.11
  1989        1.36        0.11
  1990        1.16        0.11
  1991        1.04        0.11
  1992        0.46        0.11
  1993        1.35        0.11
  1994        1.94        0.11
  1995        2.00        0.11
  1996        1.22        0.11
  1997        1.93        0.11
  1998        2.93        0.11
  1999        0.93        0.11
  2000        1.61        0.11
  2001        1.61        0.11
  2002        2.50        0.11
  2003        2.27        0.11
  2004        1.60        0.11
  2005        2.54        0.11
  2006        1.68        0.11
  2007        2.27        0.11
  2008        1.57        0.11
  2009        2.02        0.11
  2010        2.32        0.11
  2011        1.92        0.11
  2012        2.61        0.11
  2013        2.02        0.11
  2014        2.18        0.11
  2015        3.03        0.11
  2016        2.98        0.11
  2017        2.13        0.11

Notice that the increments have been growing for decades, but they are noise from year to year. The trend basically is in line with BP's estimates of carbon emissions from fossil fuels. This confirms the validity of BP's metric AND is consistent with the theory emissions from fossil fuels is a prime driver of the accumulation of carbon in the atmosphere. But because these data are noisey, it is good to average a few years at a time to dampen the noise. So we see a peak here of about 3ppm/y in 2015 and 2016. Nicely 2017 is down to 2.13ppm. Does that mean we are post peak? It's too soon to say. It could just be some random variation. However, taken together the last four years do seem consistent with the view that carbon emissions from fossil fuels have been level from 2014 thru 2016. They may have even dropped in 2017, and come June we will see what BP reports to confirm this.

It will take many more years to see if 2015-16 really was the inflection point in atmospheric CO2 or whether the climb really will continue to accelerate. Clearly this is no time for complacency, but I am cautiously hopeful that emissions may have peaked. Lots of models out there would suggest otherwise.

In this thread, we have had alot of discussion around when various peaks will happen. Coal and residual fuel oil seem well into decline. Diesel looks to peek by 2021 or earlier, and gasoline will peak about 5 years after diesel. I think the natural gas peak will be linked to rise of stationary storage, but have not yet worked out a model for this. Basically, within about 5 years there will be virtually no new gas plants built because wind and solar paired with battery storage will be so cheap. So my impression is that natural gas demand will have peaked by 2030. Putting all these peaks together carbon emissions from fossil fuel look to be declining through most of the next decade. The decline will seem slow at first, but accelerate as exponential growth gains scale.

So I remain cautiously optimistic, and I'll be watching to see what BP reports in June.

 

[adiggs]

...
In this thread, we have had alot of discussion around when various peaks will happen. Coal and residual fuel oil seem well into decline. Diesel looks to peek by 2021 or earlier, and gasoline will peak about 5 years after diesel. I think the natural gas peak will be linked to rise of stationary storage, but have not yet worked out a model for this. Basically, within about 5 years there will be virtually no new gas plants built because wind and solar paired with battery storage will be so cheap. So my impression is that natural gas demand will have peaked by 2030. Putting all these peaks together carbon emissions from fossil fuel look to be declining through most of the next decade. The decline will seem slow at first, but accelerate as exponential growth gains scale.

So I remain cautiously optimistic, and I'll be watching to see what BP reports in June.

It's clear to me, but might be confusing to others. What @jhm is saying here isn't an absolute decrease in the annual carbon levels in the atmosphere sometime in the next decade (wouldn't THAT be nice). Rather we have reason to believe that it'll become clear over the next decade that we've stopped increasing the size of our annual increase in carbon in the atmosphere. For those mathematically inclined, I believe we can say that the first derivative might have gone to zero now and it'll be clear over the next decade if it really has gone to zero and then pushed on into negative territory.

From there, we'll see the annual increase in carbon in the atmosphere start to subside (from the 3ppm level back down eventually to the sub 1ppm level of the early series of that data).

And sometime even further out, we will hopefully see the annual increase in annual carbon turn into an actual and absolute annual decrease in the level of atmospheric carbon.


Over the history of the thread, I don't think I've seen anybody take a stab at the timeframe when we'll see carbon in the atmosphere decreasing reliably on an annual basis.

 

[jhm]

Xcel Attracts ‘Unprecedented’ Low Prices for Solar and Wind Paired With Storage

This article has some really nice results from an Xcel tender for 2023 dated projects.

Here are median bids.

Wind came in lowest, at $18.10 per megawatt-hour. It was followed by combined wind and solar, at $19.90; then wind with battery storage, at $21; PV alone, at $29.50; then wind, solar and battery storage, at $30.60.

Also solar plus battery storage had median bid of $36/MWh.

Additionally, $21 for wind+storage is lower than the operating cost of all coal plants in Colorado, and $36 for solar+storage is below opex for 74% of these plants. Basically, with some mix of wind, solar and battery storage, all baseload plants are dead in Colorado. It will be more economical to replace them, than to keep running them regardless of undepreciated capex.

So these bids are leaning into cost curves headed into 2023. This tells us where developers see prices going. If they are right, baseload is dead.

 

[jhm]

It's clear to me, but might be confusing to others. What @jhm is saying here isn't an absolute decrease in the annual carbon levels in the atmosphere sometime in the next decade (wouldn't THAT be nice). Rather we have reason to believe that it'll become clear over the next decade that we've stopped increasing the size of our annual increase in carbon in the atmosphere. For those mathematically inclined, I believe we can say that the first derivative might have gone to zero now and it'll be clear over the next decade if it really has gone to zero and then pushed on into negative territory.

From there, we'll see the annual increase in carbon in the atmosphere start to subside (from the 3ppm level back down eventually to the sub 1ppm level of the early series of that data).

And sometime even further out, we will hopefully see the annual increase in annual carbon turn into an actual and absolute annual decrease in the level of atmospheric carbon.


Over the history of the thread, I don't think I've seen anybody take a stab at the timeframe when we'll see carbon in the atmosphere decreasing reliably on an annual basis.

This is correct. Thanks for making sure people caught that.

The bad news is that atmospheric CO2 has a half life of about 100 years. Thus, the 3ppm we added in 2016 will still contribute 1.5ppm to the atmosphere in 2116. So on the scale of human mortality, what we emit today is a permanent change. The best we can do is slow down the rate at which CO2 ppm increases.

For all the talk of carbon capture and sequestration, there is no clear technological path to an economically plausible solution. So I don't think "negative emissions" is a concept we can count on. Of course, trees are nice, but that only stores carbon until the tree decomposes or is burnt, then the CO2 goes right back into circulation.

So not in my lifetime will I see atmospheric CO2 decline in any meaningful way. Probably not in my daughter's lifetime either. For those who live now, the challenge is merely to slow this train down, and the first step is to let up on the dang accelerator.

 

[tander]

This is correct. Thanks for making sure people caught that.

The bad news is that atmospheric CO2 has a half life of about 100 years. Thus, the 3ppm we added in 2016 will still contribute 1.5ppm to the atmosphere in 2116. So on the scale of human mortality, what we emit today is a permanent change. The best we can do is slow down the rate at which CO2 ppm increases.

For all the talk of carbon capture and sequestration, there is no clear technological path to an economically plausible solution. So I don't think "negative emissions" is a concept we can count on. Of course, trees are nice, but that only stores carbon until the tree decomposes or is burnt, then the CO2 goes right back into circulation.

So not in my lifetime will I see atmospheric CO2 decline in any meaningful way. Probably not in my daughter's lifetime either. For those who live now, the challenge is merely to slow this train down, and the first step is to let up on the dang accelerator.

"there is no clear technological path" "So not in my lifetime will I see atmospheric CO2 decline in any meaningful way. Probably not in my daughter's lifetime either." That kind of sounds like something someone could have said about electric cars not being viable five or ten years ago, or some people probably still think that

 

[adiggs]

It's gonna crack me up if we discover, in 2 or 3 decades, that we have so much surplus renewable energy some days of the year that the thing to do is build a (meaning - many) methane manufacturing plant that takes atmospheric CO2 along with water and (surpluse / wasted) energy, makes methane, and pumps it back into these oil and gas wells. For the purpose of leaving it there.

Before that happens, I can readily imagine some businesses springing up that do the same thing in the summer, puts the methane / nat gas into storage, and pulls it back out in the winter for direct heating, or for turning into electricity. It's at least carbon neutral then!

 

[TheTalkingMule]

I'm not sure we have any way of knowing the rate atmospheric CO2 will be absorbed into the oceans after emissions truly drop a couple decades from now.

 

[Reciprocity]

It's gonna crack me up if we discover, in 2 or 3 decades, that we have so much surplus renewable energy some days of the year that the thing to do is build a (meaning - many) methane manufacturing plant that takes atmospheric CO2 along with water and (surpluse / wasted) energy, makes methane, and pumps it back into these oil and gas wells. For the purpose of leaving it there.

Before that happens, I can readily imagine some businesses springing up that do the same thing in the summer, puts the methane / nat gas into storage, and pulls it back out in the winter for direct heating, or for turning into electricity. It's at least carbon neutral then!

If you have unlimited cheap, clean energy. People will find a use. Desalinization, turning desserts into farm land. Refreezing the ice caps. Faster computers, bigger server farms. More bitcoins. As prices went up, we got innovations like LED bulbs and solar. As costs go down because if those innovations, people will come up with creative and industrious ways to use it. As humans, it's what we do. We consume everything.

 

[mspohr]

If you have unlimited cheap, clean energy. People will find a use. Desalinization, turning desserts into farm land. Refreezing the ice caps. Faster computers, bigger server farms. More bitcoins. As prices went up, we got innovations like LED bulbs and solar. As costs go down because if those innovations, people will come up with creative and industrious ways to use it. As humans, it's what we do. We consume everything.

There's a sci-fi novel by Cory Doctorow Walkaway about a future with unlimited energy and machines which can make anything on demand from junk lying around. Unlimited energy and stuff. Post climate change apocalypse.
Most people don't realize it and stick to the daily grind serving the man. A few rebels walk away and live off the abundance but are perceived as a threat so are hunted down
Cory Doctorow’s Walkaway: Hardware hackers face the climate apocalypse

 

[jhm]

"there is no clear technological path" "So not in my lifetime will I see atmospheric CO2 decline in any meaningful way. Probably not in my daughter's lifetime either." That kind of sounds like something someone could have said about electric cars not being viable five or ten years ago, or some people probably still think that

I would love to be proven wrong.

 

[jhm]

It's gonna crack me up if we discover, in 2 or 3 decades, that we have so much surplus renewable energy some days of the year that the thing to do is build a (meaning - many) methane manufacturing plant that takes atmospheric CO2 along with water and (surpluse / wasted) energy, makes methane, and pumps it back into these oil and gas wells. For the purpose of leaving it there.

Before that happens, I can readily imagine some businesses springing up that do the same thing in the summer, puts the methane / nat gas into storage, and pulls it back out in the winter for direct heating, or for turning into electricity. It's at least carbon neutral then!

I'm becoming worried that bitcoin mining could remove any chance of surplus power anywhere.

Now if you had a cryptocurrency where mining require extracting carbon from the air and sequestering, then maybe we could have a solution.

Can We Prevent a Global Energy Crisis From Bitcoin Mining?

 

[jhm]

I'm not sure we have any way of knowing the rate atmospheric CO2 will be absorbed into the oceans after emissions truly drop a couple decades from now.

I'm not a scientist, but it suspect that this is known well enough. Right now about 30% of emitted carbon dioxide gets absorbed in the ocean. There is an equibrium between concentrations in atmosphere and ocean. This is what is driving ocean acidification.

Mix in an accumulation of plastic to exceed mass of fish by 2050, and we've got one sick ocean to worry about.

But, hey, at least the oil industry can still have demand growth for another decade.

 

[dc_h]

"there is no clear technological path" "So not in my lifetime will I see atmospheric CO2 decline in any meaningful way. Probably not in my daughter's lifetime either." That kind of sounds like something someone could have said about electric cars not being viable five or ten years ago, or some people probably still think that

I think a Chia Sears tower in every major city, capturing carbon and providing a lovely 1500 foot tall urban garden.

I'm being only partially sarcastic. High rise urban carbon capture of some sort might be one small element of what will be a multifaceted solution.

 

[tander]

I think a Chia Sears tower in every major city, capturing carbon and providing a lovely 1500 foot tall urban garden.

I'm being only partially sarcastic. High rise urban carbon capture of some sort might be one small element of what will be a multifaceted solution.

Another bright spot imo (and long term reason to short oil) is with all this cheap solar/battery electrification, destination and farming in deserts is already starting to make sense. Wouldn't be surprised is in 100 years there are forests where there are now middle eastern deserts. Hopefully by then we'll just have some sort of cool global thermostat that can be adjusted as desired Only partial sarcasm here too.

 

[replicant]

This flawed logic is part of the problem. It's not about compromising our way of life, it's a transition to something far better. Paying Tesla to put solar on my roof, a battery in my garage and a Model 3 in my driveway takes nearly all fossil fuels out of my life, saves me money, provides more resilient home energy delivery, and dramatically improves my personal transport performance. Where exactly is my sacrifice? That narrative of zero-sum sacrifice is born out of utility talking points and reinforced by hippies. In reality we're headed to an era of unprecedented abundance.

I shared and defended this POV for years. That's why I invested heavily in TSLA in the first place (shareholding represents 90% of my financial assets).

Decentralized renewable energy will supplant oil&gas when everyday people decide so en masse.

Again, I agree with that. It's a timing problem: the longer we delay the transition, the harder it will get. And as it become harder, those who don't acknowledge the fundamental problem we're facing might resort to violence to resist it.

It takes time and effort to understand that entropy can't be reversed as it goes against the transhumanist belief that we can (and should) become Masters and Possessors of Nature.

I highly recommend The Infinite Desire for Growth by Daniel Cohen for a quick overview of the issue.

It's looking like the fastest way to do that is allowing legacy fossil interests to push them in the wrong direction then letting people push back. A similar path to how sexual harassment was ended in the first year of this Administration. I'm fairly upbeat on 2018.

Are you sure about that?

My understanding is that these so called victories are obtained at a very high cost which we do not acknowledged. A cost that is increasing and that we externalize. Again, it's a matter of belief: those who are defeated – take coal supporters for instance – will end up admitting that, yes, coal is dead. But as they're forced to do so, they change the topic. They switch to another battlefield, with new ad hoc hypotheses.

That's the reason why Trump is president (he's the result of that) and that's also what Trump is doing (diversion, diversion).

I think progressive transhumanists (cf. Elon Musk’s Billion-Dollar Crusade to Stop the A.I. Apocalypse) are part of the problem. They pretend that the social and political issues that arise will get fixed with technology and growth (with a few exceptions, e.g Musk's push for some regulations, Sam Altman's musing w/ basic income, etc). But they don't understand that every so-called success is obtain at a cost: those who are defeated don't actually feel and understand the benefits of the changes because they aren't align with their current value system. The transition is a long term one and people want immediate benefits (especially as the entire marketing/media system is built on the quick gratification).

They feel like they're just losing something (to someone else) and look for someone who claim to understand their loss and to be able to revive their dead dream.

By letting legacy fossil interests push in the wrong direction, we're aggravating the situation and making the change in belief harder. People won't push back where you expect: as they're losing their core belief, they'll fight against anything is perceived as trustful. They aren't actually resisting the energy transition anymore, they're fighting the belief system on which the transition rely (e.g scientific method, democracy, energy conservation, etc)

 

[replicant]

If you have unlimited cheap, clean energy. People will find a use. Desalinization, turning desserts into farm land. Refreezing the ice caps. Faster computers, bigger server farms. More bitcoins. As prices went up, we got innovations like LED bulbs and solar. As costs go down because if those innovations, people will come up with creative and industrious ways to use it. As humans, it's what we do. We consume everything.

It's time to revisit Tragedy - Wikipedia. This is Hubris - Wikipedia and history shows pretty clearly how it usually end up.

I can't understand why the concept of Pharmakon (philosophy) - Wikipedia is so underrated even when we're in the anthropocene.

We consume everything.

Oh boy, I wish: Autophagia - Wikipedia

The Autophagic Society by Anselm Jappe might be of interest.

 

[replicant]

I think a Chia Sears tower in every major city, capturing carbon and providing a lovely 1500 foot tall urban garden.

Carbon emissions are the result of entropy, aren't they?
So do you actually expect these machines to be negentropic? You might take a look at what life is, and look at the first principles.