RE:RE:A must watch video for every investor IMO good gawd, you sound like an engineer.
I thought we (or i mean americans) narrowly escaped catastrophe by ditching AOC's 'green new deal' which was projected to cost only $93 trillion (2019 $, for USA jurisdiction only) but i too believe we are still heading toward a brick wall.
https://economiccollapsenews.com/2019/02/25/aocs-green-new-deal-estimated-to-cost-93-trillion/
I too spotted some flaws in tony seba presentation, and i too agree we can't apply S curve adoption rate willy nilly to any new technology (as i said in my previous post). The crashing coal consumption is the obvious one flaw. If one look at this fossil fuel consumption chart of below link, I didn't see any demand destruction, just a tiny tiny dip in recent consumption in 2020, likely due to covid lockdown.
https://ourworldindata.org/fossil-fuels
As you and i know that coal consumption now is higher than ever before as EU has no choice but to re-start their coal power plants. France crippled their nuclear power plants due to green euphoria. What happen there was gov't took surplus money from healthy nuclear operation and shove $ to renewables. Hence nuclear plants have no money for maintenance nor new investment. Lack of new nuclear engineer entering the field too, every graduate now want to be a coder or a system analyst. A microcosm of what's happening to base load power plants in the western world.
I do believe EV would help alleviate some local air pollution, less maintenance but EV ain't gonna fix our energy or GHG problem. I do believe EV cost of ownership will drop some more but it just mean we can drive more (uber, amazon, didi, doordash), carve up more landscape and produce more tail ponds in pursue of EV raw materials.
MigraineCall wrote: Sorry Obscure, but I'm not drinking this Kool Aid. SU dropped by only 2% relative to peers on the news, a reaction to finding out about a new Q3 charge, but no biggie in the grande scheme of things. Taking 1/4 of the Fort Hills shares at a nice discount offsets this sort term accounting entry, which if all goes right, gets to be even worse once the final 1/4 held by Total is absorbed for cheaper yet.
I understand exponential change, but he is trying to make his prediction based on theoretical hand picked data sets, past disruptor innovations, and ignores the complex reality of the oil market, demographics, demand, OPEC power, geopolitical influences, and economics around the globe. The horse to car transition happened with near unlimited resources of cheap oil and steel over a century ago. Not the same conditions now. He also lost me on that coal graph. Coal use has been increasing globally, and is going to hit an all time record this year, even with all the economic woes and our climate panic transition at full pace. There are more than 150 new coal plants being designed and constructed here in Asia, and at the same time far fewer are being decommissioned. It is the net result of ever increasing energy demand with a limited supply plain and simple. We will need 47% more energy by 2050 worldwide, from every source imaginable at once. The S curve in EVs cannot happen at that rate. There are not enough mines or even resources available to achieve the massive rates of production he is expecting by several orders of magnitude in order to outright replace all the ICE vehicles. Also a good portion of ICE vehicle manufacturers are not stopping production anytime in the future in many places across the globe. Is it really feasable that we will have 10 or more times as many Tesla gigafactories out there in addition to all the other competitors? Will the increased oil consumption needed to mine and churn out 10x as much of the metals and lithium, outpace the drop in oil use resulting from the EV transition? And what new and repaired roads will they drive on? Bitumen roads, on rubber tires. Economically, there are headwinds in front of us to say the least. With an imminent global recession, debt, high inflation, some countries with triple digit inflation and collapsing currencies, the Russian Ukraine war fallout, entire industries shutting down due to lack of energy, high electrical costs forcing people to choose if they are going to freeze to death or starve, on and on. The rate of new electric vehicles purchased may be severely overestimated. In many countries including OECD, the cost per km of EV vs ICE is not wide enough, and often higher once you pull out temporary govt EV subsidies and power subsidies, and remove all the hidden road taxes and fees charged to ICE vehicles that will eventually shift to EVs one day to keep the roads maintained. It can't all be funded by photo radar.
The P/E ratios don't support the TSLA share price either. Tesla 2022 60+ to SU 2022 5.4?
Talking about something that is a disruptor, let's consider the billions of people in poorer countries with exponentially growing populations coming out of poverty and demanding transportation that will first use a cheap ICE vehicle before they can afford to spend 100 times that on a Tesla or any other EV.
Electrical infrastructure to charge an EV often does not even exist, and many do not even have power in their homes and shacks, cooking with charcoal, wood and sometimes with what came out the south end of a northbound elephant or other 4 legged beast. The grid infrastructure in these places is intermittent at best, or does not even exist, and it is too expensive to build. We can't even upgrade and expand our own fast enough or in sufficient quantity to transition and clean up emissions to meet near term target goal dates. It is coming though, as there is now a new public EV sharge station 180kms south of me. Perhaps one day I might even get to see what a Tesla looks like in the flesh. We have seemed to have said no more nuclear where it is needed most, and are opting to decommission rather than extend the life of these plants. I think half of the nuclear is offline in France. We do not have enough electrical grid capacity from renewables at best, and are rushing back to coal as a last resort to satisfy electrical demand during renewable downtime elsewhere around the globe. EVs have been around for many years already, and they only amount to a mere 2.2% of all the vehicles on the road today. The entire transportation sector for light duty vehicles is only 12% of global oil consumption, so let's pull back the sheets on a Musk wet dream and say 100% of all the people in the world including the billions of poor in Africa and Asia win lotterys at once and all end up driving Teslas by 2050. By then, the global oil reservoir depletion rates and massively increased oil E&P costs will create a supply shortfall that will by far outpace a mere 12% drop of losing the entire global fleet of light duty vehicle oil demand to Teslas. It doesn't add up. Although motivated by the noble quest of holding off climate change, we are going about this energy transition the wrong way by destroying traditional energy systems and force a change. By 2050, I think the energy transition is going to end up being the most catastrophic messed up and costly blunders in history, and the world will end up scrambling to secure oil and gas supply to use not only for energy, but the other 40% of its many other uses. Oil will be sourced from anywhere and everywhere at eye watering prices as it cannot be substituted.
We are entering an era where there are no more big giant fields left to discover on this planet like there was in the past. Supply shortages won't be evenly distributed either. Products will be the first to experience regional shortages. Lack of the correct types of refinery feedstocks will be next. US shale oil in its current volumes is the wrong type of oil for US refining feedstock and must be traded for other heavier types, and must bid to get them when they can. Shipping and pipelines will be in high demand as routes get longer, and oil in transit on the water increases. The Jones act will be waived to keep NY harbor from running out of deisel jet and heating oil, undercutting the US shipping industry but saving the Eastern Seaboard.
Global oil prices will rise. Millions of innocents will starve. Alliances are being be made as countries choose a side. Wars will be fought over food and energy supply as conditons are now worse than they were prior to the Arab spring. Governments will fail. Billions will be affected. It will also mark a huge opportunity for those that can see the real facts to anticipate where this is going and see through the sideshows and sh!tstorm of the war on oil. We may see the day when pro oil activists start to glue their hands to windmills, solar panels, and EVs demanding a return to a realistic energy policy and ending the insanity. I believe the best long term use of my investment cash is to keep owning oil producing companies in secure countries with decades of oil reserves, with capital infrastructure already in place. They will soon play a vital role to get us through the next painful stage of future oil scarcity due to continued devastating energy policy brought on by overhyped panic and forced transition without a feasable workable practical plan in place for us to get there.
Trust no one, especially our Federal leadership. Like a turtle on a fencepost, they didn't get there by themselves, but were put there by the same idiots with their hands now glued to the wall. Obscure1 wrote: Let me start with my apologies:
* Stephen Mark Ryan, the creator of the video is obnoxious and vulgar
* The video is about Tesla but the content has implications for all companies
* The video is more than 30 minutes long and drags from time to time and will probably offend you
Now for the reasons to watch it:
* Tony Seba (the creator of the content of the video) has absolutely nailed the concept of innovation and adoption rates
* After watching the video, you will understand that innovation happens exponetially in the form of a "S" curve as opposed to linear adoption. That is why the so called experts (anaylysts, organizations such as the IEA etc) get it massively wrong year after year
* While the adoption of new innovation happens in the form of an "S" curve, the rate that the old technology that is being replaced also happens in the form of a reverse "S" curve.
* The net result for established existing companies or industries that don't respond to innovation in time is that they become extinct.
* The process takes about 20 years, but the bulk of the change happens in about ten years.
Why do I bring this up on a Suncor thread?
SU bought out Teck's minority interest in Fort Hills this week. Based upon the selling price and the asset write downs for both Teck and Suncor, one would have to surmise that Tech basically gave it away.
That should be great for Suncor. Right?
Then why did the street punish Suncor. Maybe punish is too strong a word. However, if the deal was such a steal for SU, why was the SU share price dropping after the announcement when the price of oil popped up?
The explanation from the street for SU's poor share price performance was due to the size of the writedown. That's true. However, why was the selling price so low in the first place when the price of oil is so high. I think the video will help why.