Shorting Oil, Hedging Tesla

[mspohr]

Europe Can Survive Next Winter Without Russian Gas | OilPrice.com

The main message is: if the EU is forced or willing to bear the cost, it should be possible to replace Russian gas already for next winter without economic activity being devastated, people freezing, or electricity supply being disrupted,” they noted. “But on the ground, dozens of regulations will have to be revised, usual procedures and operations revisited, a lot of money quickly spent and hard decisions taken. In many cases time will be too short for perfect answers.”

 

[mspohr]

Heat Pumps for Peace and Freedom

Joe Biden Could Damage Putin Badly--and He Doesn't Have to Ask Joe Manchin

billmckibben.substack.com

It's time we enlarge our understanding of the principle of collective defense enshrined in Article 5 of NATO's founding treaty. That article calls on the member countries to take the action they deem necessary "to restore and maintain the security of the North America area." If the President combines that view of collective defense with the invocation of the Defense Production Act, we can start manufacturing the heat pumps that will electrify the 75 million homes in Europe and the UK dependent on Russian gas for their heat. Every home electrified with an American flag-stamped heat pump will provide European leaders with more political ballast because they will be alleviating economic pain for their people. It will also enable us to create a new industry — resulting in hundreds of thousands of jobs subsidized with European investment — that will spur the transformation of our own economy. This vigorous, proud and confident reclaiming of our trans-Atlantic alliance gives us a real shot at winning the climate fight once and for all. What's not to like?

 

[ReddyLeaf]

and they would have cooling for the inevitable oppressive summer heat that will only get worse.

 

[Oil4AsphaultOnly]

Heat Pumps for Peace and Freedom

Joe Biden Could Damage Putin Badly--and He Doesn't Have to Ask Joe Manchin

billmckibben.substack.com

It's time we enlarge our understanding of the principle of collective defense enshrined in Article 5 of NATO's founding treaty. That article calls on the member countries to take the action they deem necessary "to restore and maintain the security of the North America area." If the President combines that view of collective defense with the invocation of the Defense Production Act, we can start manufacturing the heat pumps that will electrify the 75 million homes in Europe and the UK dependent on Russian gas for their heat. Every home electrified with an American flag-stamped heat pump will provide European leaders with more political ballast because they will be alleviating economic pain for their people. It will also enable us to create a new industry — resulting in hundreds of thousands of jobs subsidized with European investment — that will spur the transformation of our own economy. This vigorous, proud and confident reclaiming of our trans-Atlantic alliance gives us a real shot at winning the climate fight once and for all. What's not to like?

This is dumb, because it implies that European companies are unable to make heat pumps for themselves. It's a corporate welfare program at its core, and we should refrain from promoting it.

 

[mspohr]

This is dumb, because it implies that European companies are unable to make heat pumps for themselves. It's a corporate welfare program at its core, and we should refrain from promoting it.

I'm sure that European companies can make heat pumps. The point is to rapidly expand production to flood the market with heat pumps so that everyone can install one. The pumps will be paid for. We're not giving them the pumps. American jobs and economies of scale should shift the goal posts and leave the US with an expanded industrial base so that we don't have to import them from China.

 

[TheTalkingMule]

This is a huge mistake for MBS. Hopefully this inspires Biden and Congress to take a more active role in the oil markets.

Insight: Saudi crown prince plays the oil card in quest for U.S. recognition

Saudi Arabia's crown prince says he simply doesn't care whether Joe Biden misunderstands him.

www.reuters.com

 

[Oil4AsphaultOnly]

I'm sure that European companies can make heat pumps. The point is to rapidly expand production to flood the market with heat pumps so that everyone can install one. The pumps will be paid for. We're not giving them the pumps. American jobs and economies of scale should shift the goal posts and leave the US with an expanded industrial base so that we don't have to import them from China.

So another cost-plus program. How did that work out for our aerospace industry? Heat pumps are NOT consummables. You buy one and shouldn't need another for 20 years. Really, it's not something that calls for invoking the defense act. Otherwise, why aren't we invoking it for more nickel, lithium, and copper mines as well as battery factories? Those are MORE important to securing our ENERGY (which is the crux of most wars) capabilities than heat pumps! That article was an industry puff piece and that's what I'm calling out.

 

[mspohr]

Oil and gas lobbyists are using Ukraine to push for a catastrophic drilling free-for-all | Raul M Grijalva

But the fossil-fuel industry had a different take. They saw an opportunity – and a shameless one at that – to turn violence and bloodshed into an oil and gas propaganda-generating scheme. Within hours, industry-led talking points were oozing into press releases, social media and opinion pieces, telling us the key to ending this crisis is to immediately hand US public lands and waters over to fossil-fuel companies and quickly loosen the regulatory strings.

 

[mspohr]

Ukraine war prompts European reappraisal of its energy supplies

Russia’s invasion of Ukraine has prompted European governments, including the UK’s, to make a frantic reappraisal of their energy supplies – one that arguably should have come much sooner. The first outcome has been a fresh resolve in some countries – including from the UK business secretary, Kwasi Kwarteng – to push for more renewable energy generation and energy efficiency to cut dependence on fossil fuels.

Germany has announced plans to ramp up energy efficiency and renewable energy, and is considering delaying the closure of its remaining nuclear power stations. France’s Emmanuel Macron called for a “renaissance” of low-carbon nuclear power to secure domestic energy supplies. In the US, Joe Biden used his state of the union speech to bang the drum again for his proposed clean energy stimulus programme.

Tim Crosland, the director of Plan B, a climate campaign group, said the IPCC report showed that reaching for more fossil fuels as a response to Putin would only put the world in greater peril. “There is no option of ramping up fossil fuel production as a counter to Putin,” he said. “A strategy for deescalation of the war in Ukraine can and must be integrated with a strategy for the urgent and radical reduction of carbon emissions, starting with an end to new fossil fuel supply projects, as required to limit warming to 1.5C. Separate the two logics [of climate and dealing with the war] and it’s all over.”

 

[mblakele]

Europe reconsiders its energy future

Will oil at more than $100 a barrel, gas markets in turmoil and war be enough to wean Europe off Russian gas?

www.economist.com

from The Economist

[...] At the EU level, a wide-ranging proposal to guarantee the bloc’s “energy independence”, due to be unveiled by the European Commission on March 2nd but postponed as a result of the war, is expected to advocate strategic stocks and mandatory gas storage to deal with the Russia risk in the short term, and a dramatic expansion of renewable energy and clean technologies such as hydrogen in the long run.​

​

That would be a giant shift in eu energy policy, which used to focus merely on ensuring that energy markets remain competitive. In the past few years, as climate became the dominant concern, the policy’s goals broadened. With the threat of Mr Putin’s weaponisation of energy looming ever larger, even the twin objectives are “not enough”, says Teresa Ribera, a Spanish deputy prime minister. The eu must now reconcile three competing objectives: cost, greenery and security.​

​

[...]​

​

Europe’s green policies aren’t helping. The eu has been schizophrenic about gas. Some member states, like Germany and Ireland, accept that new gas plants are needed as back-up and a bridge to a cleaner future. Others, such as Spain, want to deny natural gas the “green” label for climate reasons. Although the eu has recently reclassified gas as a “green transition” fuel, the designation comes with lots of strings attached. The confused boss of a big American lng exporter grumbles that no European utility will sign a long-term contract with him “because they don’t know what their governments will or won’t allow” a decade from now.​

​

[...]​

​

As with gas, eu member states talk at cross-purposes when discussing alternative energy sources. While Germany has been shutting down its nuclear fleet, France and the Netherlands want to expand theirs. By 2030 Spain will phase out coal, whereas Poland will still get more than half its power from the dirtiest fuel (and replace most decommissioned coal plants with ones burning gas). This confused approach makes it harder to reach the common goal of ditching Russian gas.​

​

[...]​

​

 

[TheTalkingMule]

This WTI spike is just ridiculous. At least it'll only last a few weeks/months. I'm sure oil traders are already getting set to turn their bets in the other direction any moment.

Plenty of non-SPR things we could be doing here in the US to limit demand rather than supply. After all, we've been forcing airlines to fly empty planes all around the globe just to keep airport slots. That's millions of barrels right there.

Problem is, no one really wants to solve this problem. All the way up and down the chain. From fracking workers in the Dakota's snorting coke and renting hookers, to the current US administration and both sides of the aisle in Congress.

All these players want to get WTI back under control, but it's in nobody's interest to actually take simple actions that get us off the rollercoaster.

 

[Doggydogworld]

I'm sure that European companies can make heat pumps. The point is to rapidly expand production to flood the market with heat pumps so that everyone can install one. The pumps will be paid for. We're not giving them the pumps. American jobs and economies of scale should shift the goal posts and leave the US with an expanded industrial base so that we don't have to import them from China.

Europe is far ahead of us when it comes to heat pumps, both in technology and deployment. They're almost ubiquitous in new construction. The issue is retrofit, which often makes no sense old buildings.

This guy is either misguided or shilling for easy DPA billions.

 

[mspohr]

Europe is far ahead of us when it comes to heat pumps, both in technology and deployment. They're almost ubiquitous in new construction. The issue is retrofit, which often makes no sense old buildings.

This guy is either misguided or shilling for easy DPA billions.

Old buildings regularly need to have their heating units replaced. They only last about 10 years. Makes sense to replace with heat pump. That's what I did in my house. Bonus that it's much more efficient.

 

[Doggydogworld]

Europe Can Survive Next Winter Without Russian Gas | OilPrice.com

The main message is: if the EU is forced or willing to bear the cost, it should be possible to replace Russian gas already for next winter without economic activity being devastated, people freezing, or electricity supply being disrupted,” they noted.

These people are idiots. They say: "Europe could go without Russian gas next winter, according to Wood Mackenzie. ". But in the article they link Wood Mac analyst Kateryna Filippenko actually says:

“If all Russian gas is cut off, Europe would have no chance of coping."

"... in the event of prolonged disruption, gas inventory couldn’t be rebuilt through the summer. We’d be facing a catastrophic situation of gas storage being close to zero for next winter. Prices would be sky high. Industries would need to shut down. Inflation would spiral. The European energy crisis could very well trigger a global recession.”

Old buildings regularly need to have their heating units replaced. They only last about 10 years. Makes sense to replace with heat pump. That's what I did in my house. Bonus that it's much more efficient.

They do this when it makes sense, believe me. As I said they are way ahead of us. But many older buildings aren't amenable to heat pumps. The idea that the US could free Ukrained by flooding Europe with our inferior heat pumps is classic American ignorant arrogance. And probably classic American green graft.

 

[mspohr]

These people are idiots. They say: "Europe could go without Russian gas next winter, according to Wood Mackenzie. ". But in the article they link Wood Mac analyst Kateryna Filippenko actually says:

“If all Russian gas is cut off, Europe would have no chance of coping."

"... in the event of prolonged disruption, gas inventory couldn’t be rebuilt through the summer. We’d be facing a catastrophic situation of gas storage being close to zero for next winter. Prices would be sky high. Industries would need to shut down. Inflation would spiral. The European energy crisis could very well trigger a global recession.”


They do this when it makes sense, believe me. As I said they are way ahead of us. But many older buildings aren't amenable to heat pumps. The idea that the US could free Ukrained by flooding Europe with our inferior heat pumps is classic American ignorant arrogance. And probably classic American green graft.

It makes sense to replace your heater when you can save money on a more efficient system that doesn't pollute and doesn't prop up dictators.

 

[mspohr]

These people are idiots. They say: "Europe could go without Russian gas next winter, according to Wood Mackenzie. ". But in the article they link Wood Mac analyst Kateryna Filippenko actually says:

“If all Russian gas is cut off, Europe would have no chance of coping."

"... in the event of prolonged disruption, gas inventory couldn’t be rebuilt through the summer. We’d be facing a catastrophic situation of gas storage being close to zero for next winter. Prices would be sky high. Industries would need to shut down. Inflation would spiral. The European energy crisis could very well trigger a global recession.”


They do this when it makes sense, believe me. As I said they are way ahead of us. But many older buildings aren't amenable to heat pumps. The idea that the US could free Ukrained by flooding Europe with our inferior heat pumps is classic American ignorant arrogance. And probably classic American green graft.

The article is a lot more detailed and nuanced than the quote you pulled out of context.
It would require an extreme effort. That's why it would be good to have the US help.

 

[navguy12]

It makes sense to replace your heater when you can save money on a more efficient system that doesn't pollute and doesn't prop up dictators.

You are correct, but human nature (at least in eastern Ontario) seems to not follow the logic.

Up here, folks have no issues dropping $50k for a new kitchen (with the requisite solid surface material counter tops) but are loath to spend a lousy $3k on added attic insulation.

With the carbon tax, I’ve shown the math for a buddy of mine who heats with propane that the ROI on replacing his heat plant with a heat pump is 12 years…he won’t switch.

 

[ReddyLeaf]

You are correct, but human nature (at least in eastern Ontario) seems to not follow the logic.

Up here, folks have no issues dropping $50k for a new kitchen (with the requisite solid surface material counter tops) but are loath to spend a lousy $3k on added attic insulation.

With the carbon tax, I’ve shown the math for a buddy of mine who heats with propane that the ROI on replacing his heat plant with a heat pump is 12 years…he won’t switch.

And that, folks, sums up the problem with many humans.

 

[mspohr]

EU Aims to Cut Russia Gas Dependence by Almost 80% This Year

(Bloomberg) -- The European Union’s executive arm is mapping out a path to end the bloc’s reliance on Russian gas that could see import needs cut by almost 80% this year, according to two officials with knowledge of the matter. Most Read from BloombergChina Warns U.S. Against Forming Pacific...

finance.yahoo.com

The European Union’s executive arm is mapping out a path to end the bloc’s reliance on Russian gas that could see import needs cut by almost 80% this year, according to two officials with knowledge of the matter.

 

[adiggs]

NOT-ADVICE and don't know if its a good idea.

BUT I see that 100 strike Jan '24 Chevron puts are selling for 6.25 with a 2.45 wide bid/ask spread (a limit order on these will matter, a lot). On the 5 year chart there has been a very short period over 130 beyond this current spike to over 160.

Almost 2 full years for the price of oil and a Chevron share to come back down.


If I were going to short the oil industry in some form or fashion it would be via max dated puts like these, not by selling shares short. And it would be via a company in the business of mining oil rather than somewhere else in the value chain. I figure the companies in the business of mining oil are the most sensitive to the price of a barrel of oil.

And it would be via a US based company, or at least via a company that trades on a US exchange with history of providing US exchange quality financials.

Chevron has other businesses beyond mining oil so not as pure of a play as I'd like. But also big enough on its own that unlikely to be bought out for some sort of M&A premium. Heck maybe they'll do the acquisition and shrink their own enterprise value!


Anybody else have idea(s) for a company to evaluate using these criteria? I picked Chevron a few years back for myself only because I'd seen a news report with the CEO saying that Chevron was going to protect the dividend no matter what. Subtext - even if we have to borrow the money to pay the dividend. That sounded then like a good mechanism to induce bankruptcy. I haven't really followed all that closely since then, but I hadn't realized the company's stock was up this far the last few months.