Ferg's Finds

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

Article(s)

I find Germany fascinating in that as reality bites (VW plant closures), rather than pivoting back to nuclear, it's sticking to green hydrogen plans, which even the academics are struggling to make work in their models.

Green Hydrogen Will Be Far Costlier Than Estimated, Harvard Scientists Find

Currently hydrogen costs $3 to $7 per kilogram. A number of analyses expect that will be cut in half by the end of the decade and drop fourfold by 2050, which would make it become almost as cost-effective as fossil fuels, according to the researchers.

But production costs are only one aspect of hydrogen’s price. For most sectors, storage and distribution costs are one-third to half of the total delivered price, meaning “future reductions in production costs will only have a marginal impact on the overall price,” they added.

Europe’s Economic Engine Is Breaking Dow (May 2023)

The bitter reality is that resources for generating that much clean power are limited in Germany by its relatively small coastline and lack of sun. In response, the country is looking to build a vast infrastructure to import hydrogen from the likes of Australia, Canada and Saudi Arabia — banking on technology that hasn’t been tested at this scale.

The goal is to provide incentives for hydrogen-ready gas plants, even if they’re unlikely to receive much revenue outside of dark, still winter periods when renewable production is low.

VW Seeks Unprecedented Plant Closings as Auto Crisis Deepens

“We are not productive enough at our German locations,” VW brand CEO Thomas Schäfer said, adding that factory costs are 25% to 50% above the company’s plans.

Podcast/Video

Having just finished my piece on New Energy Vehicles which leaned heavily on Dr David Davis's work (he unfortunately passed away earlier this year).

These interviews give some deep insight into the PGM situation.

Energy Crisis in South Africa Sparks Platinum Shortage Concerns; Dr. David Davis

EXCLUSIVE: Mining 2030 PGMs Outlook with Dr. David Davis

Quote

"Nothing is linear. The world doesn't move towards what we think is rational a little bit every day. The best way to manage volatility is to have a strategy that you can stick with. If you believed in it, it wouldn't matter how poorly it did for a while."

-Clifford Asness

Tweet

“The cost of intelligence will approximate the cost of energy.”

Big Tech can't simply buy the nuclear proportion of generation it requires: (US regulator rejects bid to boost nuclear power to Amazon data center).

There is one remaining plant to restart in Duane Arnold before it's build time, as Mark points out.

Charts

Kazatomprom's production profile presents a significant issue for the uranium sector, particularly with Russia and China increasingly cornering their future production.

The big issue that Dr David Davis touches on repeatedly is the decline in the high-grade platinum resources in South Africa.

I would this insight from Dr. Anas Alhajji interesting in the rapidly increasing global decline rates that we are not offsetting with investment.

"Exxon stated historical decline rates were between 4-5% per annum (average for the world).

The IEA then said that the decline rate is now 8% per annum because of shale.

Exxon has more recently said due to lack of investment, the decline rate is now up to 15% per annum"

Something I'm Pondering

Having just gone over charts of decline rates in commodities, a decline rate that is rarely mentioned is that of skilled workers in the out-of-four sector, which is experiencing a revival.

EDF, which took 17 years to build its newest plant, identified lack of labor as the primary roadblock to carrying out the revival envisioned by Macron in 2022. That year, the company imported workers from North America to handle scores of reactor pipe repairs.

The same goes for staff to bring a uranium mine to production.

I hope you’re all having a great week.

Cheers,

Ferg 

P.S. I have a favour to ask in: that my wife Mia is currently bedridden because she has slipped discs in her back, which have pinched nerves in her leg, causing sciatica and numbness.

I'm blessed to have this community, so I am asking for help with referrals/recommendations for great back specialists/surgeons in the Asia region (as longer flights will be difficult in her condition).

Also lessons/insights from experience with back surgery to help us avoid pitfalls if we are forced down this route. Any experience would be greatly appreciated, i.e., disc trimming vs artificial discs vs avoiding surgery altogether.

I'm trying to get up to speed in this area as quickly as possible to help Mia make the best decisions so she can get back to installing order with these three (which I’m failing miserably at).

You can email me at: Ferg@traderferg.com