RE:Solar vs Oili'll keep it short, don't want to be viewed as a long winded diatrube
On NG, IMO you drew an incorrect conclusion from the recent ENB asset acquisition.
On Taiwan, share price of Nvida and TSM stocks are still doing great. The market isn't too worry about the chinese invasion. Even if china invade taiwan, china is clueless on running the high tecn chip machineries anyway. If china does get close enough(big if), taiwan will destroy all their key chip factories. Optimum time is 2024 as sleepy joe will no longer be around come 2025. I place <25% chance of full invasion from china. At the very very very extreme case, Xi might just shell a section of the beach and land some chinese troops for propaganda purpose, and to test the US response, and call it a day. US and the west don't have to do much. Trump's trade war has hurt china bad already. Now imagine US/west place sanction on china. Personally i like to see china go full bore into taiwan, this will ensure the collapse of the CCP. I say, 'go ahead, make my day'
Experienced wrote: There has been a lot of discussion here about the economics of solar. Below is a study done not that long ago by CER which some here might useful.
That said, when I look at developments, I look at them from the perspective of an investor. What are the implications for my current investments and does the development suggest some potential investment targets that need to be investigated?
When I look at the debate regarding renewables like solar, by and large I don't see much of a direct link to oil demand/use since in most of the electricity in the world does not use oil in the production of the electricity. For example in the US, from stats I have seen, oil is used to produce about 1% of all electricity. So a move to the use of solar panels in combination with storage systems will not be a major factor in a decision to invest in an oil company.
So getting back to the CER study. The broad conclusion (surprise surprise) is that it depends on where you live. As far as I can determine, the CER study seems to do its math based on the breakeven costs of a solar system only and doesn't include the fact that in practical terms, an effficient and useful solar system would also require a battery storage capability. When these two things are combined, it makes residential solar systems largely impractical from a breakeven cost point of vue. But the reality is the question of how many people would have the money upfront to install such a system? My guess is very few unless the payback period becomes very short and the CER study doesn't seem to deal with fact as far as I can tell.
In this environment and as electricity demand grows and accelerates if the world moves to the use of EVs, demand for natural gas will increase. In the US, for example, about 40% of all electricity is produced using natural gas. So in this environment, natural gas a long runway into the future. This is why I invested in TOU back when it was priced in the high 20s and low 30s.
In the commercial/industrial sector, the considerations, while being somewhat similar to residential, are different at least in terms of importance. These businesses require a couple of things which are more critical than is the case in the residential sector - saving on peak pricing costs and reliability of supply. The solution to this is off-grid efficient on-demand (dispatchable) electricty production. Such a solution requires the ability to produce elecricity cheaply on-site and to be able to anticipate grid brownouts or blackouts. Companies that can provide these businesses will such a solution have a multi billion dollar annual market for their products. This is clearly from an investment perspective something to investigate.
So in summary, renewables like solar do not pose a threat to an investment in an oil company. The question though becomes as to whether there are investment alternatives which would provide a better risk adjusted return. With the potential for the market share for EVs increasing over time, reduced use of plastics and other uses for oil based petrochemicals, this is something that a pragmatic investor needs to consider. Even within fossil fuels, there is also a question that needs to be looked - oil vs natural gas. Large companies like ENB have already made that decision as their recent acquistions have centred on natural gas utilities and LNG port facitlities and reducing the dependence of their bottom line on oil based revenues.