Shorting Oil, Hedging Tesla

[jhm]

So you're the petrochemicals market, it's 2024 and oil demand has peaked. Declines are slight, but demand looks certain to drop at 5% annually. Does it feel viable to you for traditional refiners to simply shift to a majority petrochemicals mix?

No one's going into crude refining today, it's gonna attract investors in this 2025 reality? Seems unlikely. Petrochemical pricing would need to triple or more for it to be viable. Gonna be a hot mess the next few years and certainly that points to the petrochemical market shrinking, not expanding. At least in the medium term.

Soaring Chinese Demand Sparks Middle East Oil Price Rally | OilPrice.com

Well apparently there are some petrochem in China that are doing just that. But china is a net importer of LNG so there may be some import advantages here. OTOH, it makes more sense to locate gas to petrochem plants in gas exporting countries and export the petrochem product to places that must import both oil and gas.

 

[jhm]

RENEWABLE ENERGY: U.S. readies first wind-powered steel plant
This is interesting. A Missouri steel plant will be going 100% wind power. To be sure this is 100% net. The grid will be buying surplus and supplying deficit of wind PPAs to plant consumption. But over the course of the year, this should balance out. The upside here is that wind power is going beyond conventional grid demand, but tapping new demand, which in turn displaces coal consumption.

Yes, the grid absolutely should be used as a giant battery in this way. And the grid should develop battery and other storage technologies to do this essential balancing work at low emissions.

 

[SebastianR]

Good: Two of America’s biggest coal plants closed this month

Nice to see that it is not just Chapter 11 and continuous pollution but actual, physical shutdown.

 

[jhm]

Bloomberg - Are you a robot?

Interesting piece on how EVs are disrupting the motor lubricant business. EVs need different, new lubricants to optimize EV range, but EVs need 50% to 70% less than ICE vehicles do.

 

[ajdelange]

I get a real chuckle out of the increasing number of people who waste the time it takes to "disagree" with a couple of my posts. If they are really disagreeing they must feel that basing financial decisions on whimsy is a good idea. Amusement aside, I hope you guys don't lose your shirts!

 

[ajdelange]

Interesting piece on how EVs are disrupting the motor lubricant business. EVs need different, new lubricants to optimize EV range, but EVs need 50% to 70% less than ICE vehicles do.

Isn't it a little early to suggest that 1% of automobiles on the that use 70% less lube are disrupting the market? But they better be looking to the future. You don't see many people selling phonograph needles or buggy whips these days.

 

[mspohr]

Isn't it a little early to suggest that 1% of automobiles on the that use 70% less lube are disrupting the market? But they better be looking to the future. You don't see many people selling phonograph needles or buggy whips these days.

I don't know if you RTFA but it says they are planning 5 to 10 years into the future when there will be many more EVs on the road. Probably a good idea to plan ahead.

 

[ajdelange]

I don't know if you RTFA but it says they are planning 5 to 10 years into the future when there will be many more EVs on the road. Probably a good idea to plan ahead.

Isn't it ... But they better be looking to the future. You don't see many people selling phonograph needles or buggy whips these days.

Clearly I did. Clearly you didn't.

Kodak was mentioned as a model but it's not a good one as Kodak was a razor-blade business. Had Kodak successfully developed digital cameras (their efforts were pretty pathetic) that would still not have replaced their film and processing chemical sales losses.

Lubricants are obviously also a razor-blade industry; more so than cameras. A lubricant manufacturer can, rather than process his lithium supply into lithium based grease, process it into cathode material. Go long in lithium and grease! You'll be rich.

 

[jhm]

I get a real chuckle out of the increasing number of people who waste the time it takes to "disagree" with a couple of my posts. If they are really disagreeing they must feel that basing financial decisions on whimsy is a good idea. Amusement aside, I hope you guys don't lose your shirts!

Ok, you have just signalled your intent to troll this thread. We have had plenty of folks like you try that.

If I am misreading your intentions, then kindly prove it by showing respect to other participants in this discussion. But know that this disrespectul and antagonizing behavior is not welcome here.

 

[jhm]

Bloomberg - Are you a robot?

This is a nice essay by Julian Lee. I think he may be a good writer to watch.

Saudi Aramco may boast that it holds the rights to the largest reserves of crude with the lowest carbon footprint to extract, but that rather misses the point. The climate concerns around oil are not about the carbon cost of getting it out of the ground, but of what is done with it afterward.

Lee also reviews the shifting political landscape in response to climate change: floods, fires, pollution and even permafrost loss threatening to make oil and gas production in Russia more expensive.

Aramco has a solution to the predicament the industry is in — petrochemicals. The company wants to turn 40% of its crude into chemicals, according to Abdulaziz Al-Judaimi, Saudi Aramco’s senior vice president for downstream.

But petrochemicals are under pressure, too.

Globally more than 200 businesses, from Coca-Cola Co. to food and consumer goods giant Unilever NV have made commitments to reduce plastic waste, according to the Ellen MacArthur Foundation. Unilever aims to halve its use of virgin plastic by 2025. Coca-Cola’s goal is for its bottles to contain an average of 50% recycled content by 2030. Initiatives like those will make a serious dent in the projected demand for new plastics.

I very much expect the political forces fighting the oil and gas industry on carbon emissions to become emboldened on fighting petrochem plastics pollution as well. To their credit, Aramco is anticipating a product mix that is 40% petrochem. This, however, is not compatible with deep decarbonization nor will the mounting contamination of the biosphere with plastics sit well with a generation that has successfully pushed fossil industries into decline. Aramco probably needs to voluntarily clean up massive plastic gyres in the ocean if it wants to base its future on plastics.

 

[ajdelange]

Does a real troll care?

Seems I wound up here with some comments on electron transfer and then noted some of the wild stuff that gets posted here. I don't think these are private threads so if I wish to post something that runs contrary to the accepted orthodoxy as prescribed by those that consider themselves the owners then stiff bickies as far as I am concerned. I will leave it to the administrators to decide whether I am overstepping the bounds.

 

[Off Shore]

Does a real troll care?

Seems I wound up here with some comments on electron transfer and then noted some of the wild stuff that gets posted here. I don't think these are private threads so if I wish to post something that runs contrary to the accepted orthodoxy as prescribed by those that consider themselves the owners then stiff bickies as far as I am concerned. I will leave it to the administrators to decide whether I am overstepping the bounds.

In reality it's not only the administrators that can make that call. Any of us can. And one of us has. Good day to you.

 

[jhm]

Does a real troll care?

Seems I wound up here with some comments on electron transfer and then noted some of the wild stuff that gets posted here. I don't think these are private threads so if I wish to post something that runs contrary to the accepted orthodoxy as prescribed by those that consider themselves the owners then stiff bickies as far as I am concerned. I will leave it to the administrators to decide whether I am overstepping the bounds.

This is a public thread. Divergent views are quite welcome here, especially when presented with quality information, coherent reasoning and respect for other participants.

What we take exception to is disrespectful and antagonizing behavior. Insults, taunts and ad hominem attacks are out of line. Please conduct yourself in a respectful, dignified manner.

 

[canoemore]

Interesting

Secretive energy startup backed by Bill Gates achieves solar breakthrough - CNN

This post by @ZeApelido from the main thread is interesting. Perhaps this has already been discussed here, but I hadn't considered the potential of concentrated solar for industrial heat generation, which, as I understand it is one of the more challenging things to decarbonize with a simple electrify-everything approach. Very cool.

 

[ajdelange]

Please conduct yourself in a respectful, dignified manner.

Respect is not obtained by request or demand. It is earned. Let's see how many of you disagree with that.

 

[TheTalkingMule]

This clown needs to be banned. How is he here for nearly a year?

Anywho.....Brent is going south of $40 in the next 40 days, and then south of $30 by end of 1Q. Not an advise, but wanted to throw it out there as a prediction. In the last two weeks I'm reading little tidbits indicating demand erosion and further crumbling of the OPEC+ production cuts. With the strange signals US import/export levels are sending I think that combines to indicate we've entered a new phase.

Tell me something else that could com out of Vienna. These are desperate times.

All Eyes On OPEC As Another Oil Glut Looms | OilPrice.com

Global oil supply could continue to rise at a rapid pace in 2020, surpassing the increase in demand. According to new figures from the International Energy Agency (IEA), non-OPEC supply could expand by a staggering 2.3 million barrels per day (mb/d), nearly double the expected increase in demand at 1.2 mb/d.

 

[ajdelange]

This post by @ZeApelido concentrated solar for industrial heat generation, which, as I understand it is one of the more challenging things to decarbonize with a simple electrify-everything approach. Very cool.

For eons we have relied on nature (the sun) to transfer electrons from oxygen to carbon and then let them go back to oxygen by burning "fuel". There are tons of advantages to this as a unit mass of carbon contains lots of energy, is relatively stable, the rate of extraction is easily controlled etc. But the downside is, of course, that in letting the elecrons flow back to the oxygen we are returning oxidized carbon to the atmosphere at a rate potentially higher than the rate at which nature takes it out.

In electrical energy production the energy released by oxidation is used to heat steam which is used to turn a turbine, If we use the energy from the sun to produce the steam directly then we bypass the whole redox process and conversion of solar energy to electricity is much more efficient. Doing this is not really difficult conceptually - you direct sunlight to a boiler and voila. There are some technical difficulties, however, such as collecting the sunlight and focusing it but these difficulties are demonstrably surmountable, with the exception of the rather major ones that the sun doesn't shine at night nor very much during the day when the declination is low (norther hemisphere) and when the sun does shine most is not the time when the system needs the power. The real challenge is not in concentrating the sun nor in setting up PV arrays but to find a way to store the energy produced so that it can be parceled out when needed.

There are, of course, lots of practical matters to be considered related to the capital and operating costs. One can now apparently build an PV array plant for less per kW than a new coal fired plant. Don't know if that same comment would apply to a solar concentration one.

 

[winfield100]

..... If we use the energy from the sun to produce the steam directly then we bypass the whole redox process and conversion of solar energy to electricity is much more efficient. Doing this is not really difficult conceptually - you direct sunlight to a boiler and voila.......
There are, of course, lots of practical matters to be considered related to the capital and operating costs.
One can now apparently build an PV array plant for less per kW than a new coal fired plant. Don't know if that same comment would apply to a solar concentration one.

No info on boiling water to make electricity but
Before tax credits, $2.70/watt, installed, w/permits, profits, etc. for 59.9sq meter, 11,655kW PV system that makes ~190% of a retired couples needs with plug in hybrid electric.
Hope this data point helps you
Edit:
Now, scale by a few million roofs to get rid of most T&D costs, aggregate for FCAS, etc

 

[ajdelange]

That's about right for residential but on the industrial scale I think I heard $0.30 in a video.

 

[Doggydogworld]

This post by @ZeApelido from the main thread is interesting. Perhaps this has already been discussed here, but I hadn't considered the potential of concentrated solar for industrial heat generation, which, as I understand it is one of the more challenging things to decarbonize with a simple electrify-everything approach. Very cool.

My BS meter jumps to life when I see Bill Gross, famous investor names and buzzwords like AI in the same article....

This article says CSP receiver temps can reach 3000C, but no receiver can handle those temps so 1000C is a practical limit. How does using AI to aim mirrors fix that?

I seem to recall a few CSP systems screwing up and aiming too much flux in too small an area, leading to molten fun. I've also read of research into working fluids that can handle the higher temps heliostats can easily generate, as that could improve thermal efficiency. It seems high temps are easy to achieve, but devilishly hard to manage.

Desert CSP is terrific in theory, plus the systems look cool. Synchronized dancing mirrors! Glowing receivers! Cheap molten salt storage for 24x7 dispatchable power! But the systems never deliver on their promises. Thousands of moving parts and long pipes full of 500-1000C oil drive costs up and create myriad failure modes.