Ferg's Finds

This is a short weekly email that covers a few things I’ve found interesting during the week.

Sep 03, 2023

Article

Goehring & Rozencwajg is always worth a read: Golden Foresight: When Speculation Meets History

Podcast/Video

This talk is the extended version of the below quote: Last Lecture Series: “How to Live an Asymmetric Life,” Graham Weaver

Quote

“Hard choices, easy life.
Easy choices, hard life.”
-Jerzy Gregorek

The would be my motto if I was ever required to have one.

The bad news for wind power just keeps flowing.

Orsted plunges 20% on risk of $2.3 billion in US impairments

Siemens Energy warns of €4.5bn loss from ailing wind turbine division

Vestas CEO sees continued challenges as wind giant posts another loss

Now China one of the main areas of growth has phased out subsidies.

Charts

This presentation from Art Berman was an eye-opener.

I never realised the “Hedonic Adjustment” taking place in that 40% of US “oil” production isn’t oil.

30% is natural gas liquids, of which 50% is ethane (used for plastics). The rest is fuel ethanol, which has questionable EROI and refinery gain.

This is important as natural gas liquids only have 2/3s of the energy of oil, so we are overstating the energy we’ve added to the system over the last decade when you consider all the additional “oil” that has come from shale.

On a global basis is it roughly 20% non-oil oil.

Something I'm Pondering

I’m pondering some of the unintended consequences of trying to phase out passenger vehicles with EVs.

Join me on a little thought experiment…

If I were to snap my fingers and replace ICE passenger vehicles with EVs (all the material and transmission constraints magically disappear).

We would still be left with road freight (and all heavy machinery), air and marine (rail is easy to electrify.

Consider China and Indias ratio of passenger vehicles to road freight for example.

Well, my first thought is we would have needed a heap of diesel to dig all those battery materials up.

The next thought is we can’t just cherry-pick what we want out of a barrel. Refineries are massively capital-intensive and utilise every molecule of a barrel of oil.

Gas would get super cheap as it would become the “undesirable” component of getting to diesel and jet-fuel.

This in itself would put the breaks on a transition to EVs as gas would be getting cheaper and cheaper.

Alternatively, we would have to switch tens of billions of diesel vehicles to gasoline, which would be a hugely energy-intensive undertaking.

Cheers,

Ferg

I’m getting back into my old schedule of regularly interviewing interesting guests. This week, I had the pleasure of Alexander Stahel walking me through the EU natural gas situation, which I found hugely insightful and timely.