Fact and Fiction - Where is the world Going?Nice to see a spirited debate on renewables and oil....warms my heart...
But let's get down to where all this leads us as investors....just starting to write so I don't know if this will take one or two posts to get through everything.
Solar
1.....costs have gone down and so have the costs of storage....BUT...in Ontario right now the cost to install sufficient solar panels to go off grid for a household is currently about 18-23K. Net of the 5K Federal subsidy this is about 13-18K. Based on the average usage in Ontario for a typical house, the payback is about 10-12 years. This number is based on a rooftop system. The roodtop system has to be cleaned and unless you do it yourself (at my age that is a no-no), you have to hire somebody to do it and this cost money and extends the payback period. Perhaps in a few years the math will be different. Right now the math is not compaelling.
Dispatchable Energy Electricity Production
1...this is the way of the future. Such sources eliminate the need for grid expansion and protect businesses from power interuptions from the grid. The systems under development (I have invested in one such private company and the cap value of the company is already 16X from what I paid for my shares two years ago) is based on natural gas and biogas with the possibility of using hydrogen if the math and technology issues get solved over time. Notice that oil is not in this equation.
EVs
1....Like it or not most Governments in the developed world where most of the oil demand exists have legislated that new auto and truck sales by 2030 or 2035 will be 100% EVs. This will make a huge dent in the demand for oil and will increase over time as ICEs become too old to be driven anymore. Oil is not used in the production of electricty and so as oil demand for transportation declines, oil demand will decline.
2...billions of dollars are going into EV technology and just like what happened in the telecommunications industry, developing countries will use the new technology not the old.
I could go on but here is the bottom line as investors IMO...
A....the greatest returns come from investing in growth industries and oil is not one of them
B....the next big thing in terms of investing are industries/companies that are finding solutions to the inevitable problems associated with the transition to a less carbon centric world
C....the transition in Point B will take a while so oil companies won't go broke soon and low cost producers like SU and CNQ will do OK for a while but their future SP will lag other sectors. See Point 1 under Dispatchable Energy
D....during this transition, there will be lots of volatility in the price of oil and so there will be shorter term opportunities to make money if you are nimble like Migraine but as a long term hold...not so much.