I seem to remember an e-mail going around not too long ago about different politicians and oil CEOs "going into the confessional," so to speak.
First up was ConocoPhillips (NYSE: COP) CEO Jim Mulva, who said he did not believe the global oil supply would ever surpass 100 million barrels per day because of production constraints and new laws limiting greenhouse gas emissions.
I love how Peak Oil can be cloaked in such nebulous terms as "production constraints."
According to ConocoPhillips, the International Energy Agency has forecast that supply will expand to 100 million barrels of oil per day by 2020.
And then there was President Bush, who, during an interview with a European reporter, had this to say about the price of oil approaching $100 per barrel: "I believe oil prices are going up because the demand for oil outstrips the supply for oil. Oil is going up because developing countries still use a lot of oil. Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling. That's why the price of oil is going up."
That too sounds like Peak Oil, with a little guile on the side.
So that's it then. The leader of the Free World and the head of one of the largest oil companies in the world say, albeit not explicitly, that oil demand is outpacing supply and finding new sources is going to be difficult and expensive.
So renewables are going to reach grid parity soon, right?
Not if Royal Dutch Shell (NYSE: RDS.A) CEO Jeroen van der Veer gets his way.
Last week, in speech entitled "Shell Scenarios for the 21st Century," van der Veer said the world faces a doubling of energy demand by 2050 but renewable sources are still too expensive and will take decades to make a big impact.
He also outlined what he called the three hard truths facing the world:
1. A big rise in demand as the global population rises from around six billion to nine billion by mid-century
2. Most renewable energy sources are still far too expensive, even compared with higher prices for oil, gas and coal.
3. The reserves of oil and gas that are easily accessible and close to the markets where they are required are depleting.
He added to his third "truth" that extracting new supplies would require much larger investments per unit than in the past.
So to summarize: We need more energy. Oil is more expensive and harder to get. Yet renewables are not competitive, even with the rising prices of fossil fuels.
What is this guy smoking?
More on Grid Parity
If I'm right, and I am, recent developments in renewable energy mean that solar is already achieving cost parity in locations that don't have easy access to fossil fuels.
Hawaii is the perfect example. And just so you know I'm not making it up, here is a quote taken right from the BP(NYSE: BP) website: "In the USA, parity with the electricity grid at peak charging rates has already been achieved in northern California and Hawaii."
Their website also states that Italy, Germany and Spain are good candidates to achieve parity in the near future. That should mean in the next year or two, as major solar producers are preaching grid parity by 2012.
Of course, we'll continue to need oil and coal, but in lesser and lesser quantities. And here's what I don't get.
Why are most of the major players (company executives, politicians, et al.) so divisive when it comes to the energy issue? It's either "We need to open up more oil drilling." or "Nuclear is the way to go." or "Renewables are the answer."
When, in reality, there is going to have to be a mix of available fuel sources for years to come.
Point is, renewables have the most market share to gain. And they're doing it because costs are falling, interest is rising and the world is finally starting to realize that renewables can be a viable source of energy not only on a decentralized level, but on a massive scale as well.
Last week at the Piper Jaffray Clean Technology and Renewables Conference, most of the major solar companies, as well as a few energy storage, wind and alternative fuel cast members made their case.
But they weren't making it to just anyone. In the audience of every session were hedge fund managers, investment bankers and several private equity guys. They're all trying to get a piece of what they know is going to a major part of the energy market going forward.
The universal verdict: All major solar module producers (think FSLR, SPWR, STP and others) are ramping up production and driving down costs.
In fact by the end of 2009, First Solar (NASDAQ: FSLR) will have a production capacity of over 1 gigawatt (GW). And they're all but guaranteeing electricity at $0.08-0.10 per kilowatt hour (kWh) no later than 2012.
That was the mantra throughout the entire conference--from a variety of companies.
So sorry Mr. van der Veer. Unless by "decades" you meant less than five years, I'm afraid you're off the mark.
And as these companies ramp up output, there is going to be some serious money to be made. We're truly on the ground floor of a massive opportunity.
The savvy investors that load up now on the right solar, wind, geothermal, energy storage and battery stocks are going to be the titans of the 21st century.
We'll tell you which ones to buy today at Green Chip Stocks.
Until next time,
Nick
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Also, high temperature catalysts (coming) for FT enable locating a single vessel ahead of the gas turbine to make liquids. Looks quite feasible. The gas turbine doesnt care if some carbon is stripped out; all it needs to see is a high temperature and pressure gas.
Finally, CO2 is not a factor as Ive discovered a solid database that shows climate temperature trends have not veered upwards one bit. Regression analysis show still straight-line temperature trends all 4 seasons even though CO2 emissions increased 80% since 1970. There should have been a temperature effect in this data if CO2 effects were real. If we cant believe real temperature data, what can we believe?
I am doubtless one of your older readers, but was involved in solar energy as early as 1975! At that point, we used to sell the design of a simple roof panel using water as the collecting medium, and it worked very nicely. It was very early days in electronics, as well, but part of the design involved a little electronic gadget to control the flow when conditions could lead to a net loss of heat (it was fairly often very cloudy in rural Wales, where I was living at the time).
The development of photovoltaics is extremely interesting, and doubtless a lot of hedge fund managers are toying with the idea of making a big fashion statement. A mass deployment of this technology sounds highly commendable, but the two practical problems mentioned in heading are:-
1. The best return on cost/reliability will come from installation in very sunny places -- think of the Caribbean and Florida. As we know, these are prone to hurricanes, which the climate scientists predict are likely to get worse in future, due to the vast amount of energy stored in the seawater. Clearly the equipment will be designed to withstand heavy rainfall, but films of hurricane-force winds very frequently show entire roofs being stripped off buildings. Surface-mounted things are only as good as the robustness of the surface on which they are mounted, in such conditions. I have not looked with any diligence, but have never heard comment about how these PVs can withstand extreme weather. Presumably this has been thought about?
2. I'm not sure whether I believe the story, but there was one in the London "Times" recently about an ancient church in the North of England where thieves had taken the lead from the roof no less than 4 times in a single year. In the hot places, the poor would love to have aircon just as much as the rich want it and (based on my single visit to Florida a few years ago) they tend to live in close proximity. Is there a convincing answer as to exactly how one can be confident that what can just be screwed onto an existing roof cannot as easily be unscrewed and made to disappear?
Regards, Stephen
And surely they are aware of the rising interest in "Water Power" which they have kept out of the public arena for several decades, but that will become a threat to "Oil" and the other Alternatives simply beacause so many people are becoming increasingly aware of the simple production process.
I know you are trying to sell information on cleantech stocks, but it does not serve you well when your information (or your interpretation of information) is off the mark.
Your critique, in the above referenced article, of Shell CEO (Jeroen van der Veer) is totally misleading. In fact, he is one of the "good guys" in the whole "Peak Oil" debate. If you really read his "corporate email," as reported by The Oil Drum at URL:
file:///Volumes/Drive%202/Projects%20G5%202:24:08/Investments/Solar%20Power/Peak%20Oil/Shell%20-%20Scramble:Blueprint%20-%20Jeroen%20van%20der%20Veer,%20Chief%20Executive.webarchive
you will see that he admits that Peak Oil will occur no later than 2015, and he suggests two different scenarios for dealing with that horrific fact:
SCRAMBLE - which is the total world destabilizing result if we all don't plan ahead by at least a decade, and;
BLUEPRINT - which is the more orderly economic/social outcome if we all recognize the problem now and start to deal with it.
This guy has really "come to God" on the World Energy crisis, but, for some reason, you overlooked or misinterpreted his assessment. How are we to believe your investment suggestions if you can't get the current facts straight?
BTW, take a look at what the recently retired head of exploration at Saudi Aramco said about Peak Oil. Or contact me at awbeattie@earthlink.net.
Best,
Alan Beattie