Ferg's Finds

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

Article

I enjoy reading the forecasts each year in the BP Energy Outlook 2024

“Chinese coal consumption peaks before 2030 and falls thereafter: this decline accounts for almost 90% of the reduction in global coal consumption by 2050 in Current Trajectory, and around 60% in Net Zero.”

BP analysts must have missed this in their “current trajectory”.

China now has 243 GW of coal power under construction and permitted (+23%). When projects currently announced or in the preparation stage but not yet permitted are included, this number rises to 392 GW. This means that coal power capacity could increase by 23% to 33% from 2022 levels

Podcast/Video

Stoked Chase has launched a podcast, and this one was a cracker: Taylor Made Macro: Practice 3: Find Inflections in Cyclical Businesses Undergoing Secular Change Like Kuppy

Quote(s)

"It is difficult to maintain patience when managing other people’s money.... The decision to remain patient is an active decision, no less important than buying or selling a security."

-Bob Robotti

Tweet/Notes

This was a great Substack Note by Mihail. I can’t remember where I heard it; “OPEX is breathing, while CAPEX is eating”.

Charts

This chart from Ray Dalio's The Changing World Order: The New Paradigm illustrates why, moving forward, things are more likely to resemble the 1930s- 40s than the 1970s-80s.

Something I'm Pondering

I'm pondering how the economics will ever make sense to "transition" away from young assets. US shutting down plants that are, on average, 45 years old (with cheap natural gas alternatives) is a very different proposition from shutting down a relatively new plant in Asia.

This isn't just coal, either. It applies to all sorts of industries created in the last twenty years with the rise of China. Take ammonia production, for example.

I hope you’re all having a great week.

Cheers,

Ferg

P.S. I now have a directory for all my articles (free and paid). Or if you’re interested in my story and why I started this Substack, you can read the story here.