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To me this signals that Buffett believes that huge growth of cheap and crazy-popular wind and solar generators will continue to be directly correlated with a ma

To me this signals that Buffett believes that huge growth of cheap and crazy-popular wind and solar generators will continue to be directly correlated with a massive expansion of fracked natural gas (i.e. high-carbon fossil fuel) to back up their intermittency. Fracked natural gas is certainly better than coal in almost all metrics (way less deadly air pollution, arguably less carbon emissions given better pipeline seals/maintenance), but it is not compatible with a climate solution because of its high carbon footprint. I'm always advocating for 24/7 low-carbon, low-land, low-material energy (i.e. energy with high power density) like nuclear but it appears that the public simply is not interested. It would help if we could just choose a reactor design and serialize it like the Koreans did to get costs way down.

inetknght 6y ago
> To me this signals that Buffett believes > it appears that the public simply is not interested I'm not sure I agree. I'd say that it appears that Warren Buffet is not interested. I think the public is interested but can't afford the investment.
- acidburnNSA 6y ago
  I guess I'm thinking Buffett's lack of interest is related to the public's lack of interest at the current price point. On June 23, a Pew Research poll about energy preference came out. Nuclear did relatively poorly compared to renewables but, to your point, it did beat out most fossil-based solutions (barely). [1] https://www.pewresearch.org/science/2020/06/23/two-thirds-of-americans-think-government-should-do-more-on-climate/ https://www.pewresearch.org/science/2020/06/23/two-thirds-of...
  - tankenmate 6y ago
    But the real issue if the how much the transmission providers are willing to pay. This market is open to all generators of an acceptable size who have passed govt. certification. In most countries this market is an auction in various sized time blocks (from months long down to a few hours). Obviously the price of solar and wind are lower than coal in a lot of localities, and in some are even lower than natural gas. And what's more for solar once it is in place it has miniscule opex, so almost any price above zero will produce net revenue. Natural gas will find it hard to compete with this in even a few years time. Having said that in the US approx 30% of natural gas is used in electricity production. Even though it is a minority of end use market share it will still affect prices. So I'd say if Buffett got it at a 30% discount or more he should be OK, a lesser discount may be problematic.
toomuchtodo 6y ago
While I don’t think Buffett is going to live long enough to see if this bet pays off, it’s reasonable that this natural gas play is going to fall flat considering renewables uptake and the cost decline curve of battery storage. This is without even discussing that many jurisdictions are considering or are starting to ban natural gas distribution to residences. After coal is driven out for electricity and heating, climate advocates and policy makers will be coming after natural gas next (and rightfully so if we intend to limit total carbon emissions). It’s not quite as “dumb money” as SoftBank, but very similar to T Boone Pickens’ natural gas play. Dominion sees the writing on the wall and found a greater fool. http://pickensplan.com/the-plan/natural-gas/ http://pickensplan.com/the-plan/natural-gas/ https://www.utilitydive.com/news/utilities-dont-see-stranded-assets-as-a-top-risk-should-they/572246/ https://www.utilitydive.com/news/utilities-dont-see-stranded... ("We get approached a lot about buying gas plants in the U.S. — I wouldn't touch one ... In a lot of these [jurisdictions] it's the next coal, and I think it's coming quicker than we think." — Ken Hartwick, President and CEO, Ontario Power Generation) https://www.utilitydive.com/news/renewables-storage-poised-to-undercut-natural-gas-prices-increase-strande/562674/ https://www.utilitydive.com/news/renewables-storage-poised-t... (“If all proposed gas plants are built, 70% of those investments will be rendered uneconomic by 2035, according to the Rocky Mountain Institute“)
- epistasis 6y ago
  I agree, in that this seems like the wrong tech to back at this time. However, I do wonder if these pipelines could be transitioned to something like HVDC; rip out the pipe and use the right of way for an entirely different, safer purpose that will have tremendous value in the future. Building new transmission is unbelievably difficult in this age, and I think most of the opportunities for doing so will require repurposing existing, defunct infrastructure.
  - toomuchtodo 6y ago
    Underground HVDC is straightforward (supporting anywhere between 600MW and 1.5GW of capacity) and can be an effective replacement for above ground projects blocked by NIMBYs. More money, but doable, and in zero interest rate policy environments just borrow some more. You don’t even need to rip out existing pipes, you can leave them in the ground purged and unused. I would expect that you’ll also see “repowering” projects where aging overhead AC transmission lines are upgraded to more efficient, higher capacity HVDC.
twsttest 6y ago
A significant portion of the public is interested, but crucially those who have influence presently are not. The post-carbon energy debate is dominated by green energy advocates who are fully invested in wind and solar to the exclusion of nuclear. Their militant anti nuclear views have been accepted by the public due to reactor meltdowns and nuclear's justifiably poor reputation. However I believe the debate is shifting. With increased public awareness of safe(er) modern reactor designs I think the public's fear of nuclear is receding which will lead to increased nuclear advocacy, especially among politicians who will view nuclear advocacy as a prudent middle ground that can win over people who are concerned about climate change but also uncomfortable supporting aggressively anti-nuclear environmentalists who have up until now been the face of climate change advocacy.
epistasis 6y ago
> low-material energy (i.e. energy with high power density) like nuclear Nuclear is not particularly dense, kilogram for kilogram, compared to something like solar. A reactor and containment and cooling require absolutely massive amounts of concrete and steel. And check out the size of the new SMRs that are being proposed; 1-10MW of an SMR isn't that tiny. I haven't run the masses at all like I have with solar and 1GW plants, since I'm not very familiar with wind turbines, but I wouldn't be surprised at all if wind and SMRs were within an order of magnitude of mass per MW. Nuclear gets tons of energy out of small masses of fuel, but the rest of the infrastructure isn't so small, especially compared to solar which has massless fuel.
- acidburnNSA 6y ago
  They are indeed massive, but a gigawatt is a lot of power! In the balance, nuclear uses a vastly less raw material and land per energy than almost all other energy sources. The DOE 2015 quadrennial report shows data on things like this, and here is a plot of the data (with citation) [1]. Where are you getting your info? E=MC² from the fuel does indeed carry over into incredibly low land, raw material, and waste footprints in nuclear. That's what's so cool about it. [1] https://images.squarespace-cdn.com/content/v1/56a45d683b0be33df885def6/1559929822962-FA47VAASFE2H053HDUQI/ke17ZwdGBToddI8pDm48kNvT88LknE-K9M4pGNO0Iqd7gQa3H78H3Y0txjaiv_0fDoOvxcdMmMKkDsyUqMSsMWxHk725yiiHCCLfrh8O1z5QPOohDIaIeljMHgDF5CVlOqpeNLcJ80NK65_fV7S1USOFn4xF8vTWDNAUBm5ducQhX-V3oVjSmr829Rco4W2Uo49ZdOtO_QXox0_W7i2zEA/The+Complete+Case+for+Nuclear+-+English.008.jpeg?format=1000w https://images.squarespace-cdn.com/content/v1/56a45d683b0be3... Edit: actual citation is table 10.4 in [2] on pg 390 of the pdf. That cites ref 52 which points to [3] from Argonne National Lab. Would be nice to find a better reference. [2] https://www.energy.gov/sites/prod/files/2017/03/f34/quadrennial-technology-review-2015_1.pdf https://www.energy.gov/sites/prod/files/2017/03/f34/quadrenn... [3] https://greet.es.anl.gov/ https://greet.es.anl.gov/ More info in here [4] [4] http://pubdocs.worldbank.org/en/961711588875536384/Minerals-for-Climate-Action-The-Mineral-Intensity-of-the-Clean-Energy-Transition.pdf http://pubdocs.worldbank.org/en/961711588875536384/Minerals-...
  - _jal 6y ago
    > nuclear uses a vastly less [...] land per energy It really depends on which particular installation we're talking about, doesn't it? https://medium.com/social-innovation-japan/fukushimas-nuclear-exclusion-zone-7-years-on-5b1998a1d560 https://medium.com/social-innovation-japan/fukushimas-nuclea... There are some other ones occupying rather a lot of land as well...
pulse7 6y ago
"Fracked natural gas is certainly better " ... "way less deadly air pollution"... but way more water contamination by fracking chemicals...
- acidburnNSA 6y ago
  I've seen the video of the guy opening his faucet and lighting it up but I read somewhere that that was found to be biogenic, and that that kind of thing is actually really rare with fracking. Not an expert in this though so I could be wrong. Coal pollutes lots of water though so it seems hard to beat. Certainly fracking causes more fracking waste than coal, but I believe the overall environmental impact is less across the board.
  - kube-system 6y ago
    I think a lot of people forget: 1) how bad well water often naturally is and 2) that it still exists. There is a reason why treated public water systems are such a foundational part of modern public health. I have family whose water is undrinkable, not due to man-made pollution, but due to high levels of natural minerals in their well. They rely on bottled water for human consumption. https://www.epa.gov/privatewells https://www.epa.gov/privatewells
- kube-system 6y ago
  Coal mining also often employs processes that pose the risk of water pollution. eg. https://en.wikipedia.org/wiki/Acid_mine_drainage https://en.wikipedia.org/wiki/Acid_mine_drainage The difference is that human activities can be changed through regulation. The chemical byproducts of a combustion reaction cannot.
  - maliker 6y ago
    And then there are serious water pollution problems around the management of coal ash after the combustion process. E.g. https://en.wikipedia.org/wiki/Kingston_Fossil_Plant_coal_fly_ash_slurry_spill https://en.wikipedia.org/wiki/Kingston_Fossil_Plant_coal_fly...
heavenlyblue 6y ago
To me it signals this company is undervalued
- vmception 6y ago
  Exactly, that's the only thing that matters in this calculus unless Berkshire Hathaway governance forces them to add additional factors into purchases in some industries.
- all_blue_chucks 6y ago
  To determine whether a company is undervalued you must have some prediction of future business prospects.
  - marvin 6y ago
    Or have faith in the guy that's been the most successful investor in modern history, up until now.
    - cik 6y ago
      He's still been the most successful investor in modern history, including covid. It's a blip to him - and he's right. He's one of the few to consistently beat the S&P 500, and even so, he recommends just buying the index.
      - fiachamp 6y ago
        good luck buying the index in a zero interest rate policy world...see nikkei since 1990 for example performance
        cik 6y ago
        A zero interest (or low) interest rate doesn't have to equal stagnation. The free flow of money could also kick start an entire generation of entrepreneurs, solely by reducing capital risk. The performance of the Nikkei is significantly more complicated than just a low interest rate. For example. the lack of productivity and population growth in Japan is another set of pieces that also impacts the rate of return.
vkou 6y ago
> I'm always advocating for 24/7 low-carbon, low-land, low-material energy (i.e. energy with high power density) like nuclear but it appears that the public simply is not interested. As a member of the public, I have never been asked where I want my electricity to come from, so my interest has little bearing on what actually gets built. The public may be asked to make a decision by proxy (R versus D), but that is only one of many decisions that get made, as a consequence of that choice.
- acidburnNSA 6y ago
  There are a lot of policies put in place that affect the energy markets that elected leaders are heavily involved in. For instance, there are production tax credits for wind. There are incentives for rooftop solar. There is talk of a carbon tax or cap and trade. There are debates about whether or not nuclear should be counted for or against clean energy targets. In the 1970s, there was massive legislation (the clean air act) that increased the costs of coal dramatically. These all greatly influence the mix of energy that gets built and are very tied to consumer preferences (if a little indirectly).
- distances 6y ago
  Can't you choose your electricity provider? I definitely check the electricity production type pie chart every time I switch providers.
  - vkou 6y ago
    I have a choice between having the one regional electricity provider provide me with electricity, and having no electricity. If I owned a free-standing house, I could theoretically switch to rooftop solar, but it is uneconomical compared to utility solar.
    - distances 6y ago
      Right, then there's indeed quite little you can do directly.
  - 6y ago
danans 6y ago
Buffett's utility holdings (i.e. PacifiCorp) are aggressively shutting down coal plants and ramping up their wind/solar capacity in their service territories. One perhaps far-fetched possibility here might be that he is vertically integrating the natgas based aspect of their utility business instead of buying natgas from another company while as you say dealing with the intermittency of renewables, although that would require some kind of merger with those utilities so that the natgas input could be provided at-cost to them.
- cs702 6y ago
  He owns both extensive utility operations and extensive transportation operations. Might as well own some natural gas assets too, if it can be acquired at the right price.
workingname 6y ago
I only see him valuing the pipelines themselves, and perhaps not as strong of a shift into absolving fossil fuels like everyone expects. Humans are slow to change and adapt, I mean look at coronavirus and masks in the US. Natural gas is great because of the low levels of emissions, the not so great aspect is fracking continuing to mess up peoples homes, i.e. flaming sinks. Those that are in control should advocate for the publics best interest imo.
- truculent 6y ago
  > look at coronavirus and masks in the US. Equally, look at coronavirus and masks in western Europe
  - GEBBL 6y ago
    Do you mean to say we in Western Europe are wearing masks and have it right? Here, we are also struggling to get the message across that it needs to be worn.
    - mschuster91 6y ago
      We may be struggling, but nowhere near the levels seen in the US and Brazil. Many of us were shocked by the pictures of the military trucks carrying the dead in Italy.
    - truculent 6y ago
      Uptake in Northern Europe seems to be lower, but rapid change in Western Europe over the course of a couple of weeks/months: https://www.economist.com/graphic-detail/2020/07/08/face-off-over-face-masks-europes-latest-north-south-split https://www.economist.com/graphic-detail/2020/07/08/face-off...
- acidburnNSA 6y ago
  The not so great aspect of gas is that its a high carbon fossil fuel that causes global warming. 490 gCO2-eq/kWh is not even close to low. Low carbon sources have lifecycle emissions closer to 10.
reaperducer 6y ago
Maybe he's not interested in the natural gas for energy. Everything I know about natural gas came from visiting and energy museum, but from what I remember, natural gas is used to make hydrogen, plastics, fertilizer, certain types of animal foods, and even things like vitamins. At an elementary level, it's easy to imagine a world without natural gas because there are lots of other ways to make electricity. But it's harder to imagine a world without plastic.
- mxschumacher 6y ago
  ~50% of us homes are heated with nat gas.
hristov 6y ago
First of all the assumption of nuclear being low carbon is really doubtful. Nuclear requires fuel and uranium mining is a very expensive and dirty process. The real carbon impact on nuclear depends largely on the quality of the uranium ore and for bad quality ores the impact maybe worse than natural gas. See here for more details. https://theecologist.org/2015/feb/05/false-solution-nuclear-power-not-low-carbon https://theecologist.org/2015/feb/05/false-solution-nuclear-... Furthermore, the massive risks of nuclear are inescapable for any right-thinking person. Furthermore, the almost eternal nuclear waste problem is still there and still has not been solved. Furthermore, even if gas is more carbon intensive it is better overall, because it allows for zero carbon generation like solar and wind to flourish. Because gas can be used to compensate when there is no wind and no sun. Nuclear is absolutely useless in these cases because it is very slow to start up and turn off. The fact that nuclear is "24/7" is not actually a positive thing when you want to to work with cheap solar/wind energy. Eventually we will develop suitable storage solutions but until then gas is a good interim solution.
- acidburnNSA 6y ago
  The myth of nuclear being not low-carbon has been wholly rejected by a large and significant meta-analysis of the IPCC itself, as clearly seen in Table A.III.2 in [1], which puts nuclear at 12 gCO₂-eq/kWh, the lowest on the list except for wind at 11. Solar is around 40. Natural gas is 490. Coal is 820. The data are plotted here [4] directly from that table. It's no surprise either. When uranium has 2,000,000x more energy per mass than any chemical, and when splitting atoms has nothing to do with carbon emissions, it's very difficult to make it high-carbon through lifecycle issues. I went deep with someone a while back on here who claims that nuclear was closer to 100 gCO₂/eq than the IPCC number of 12g CO₂-eq/kWh, and they realized they were using 1950s energy values for gaseous diffusion enrichment instead of much-more-efficient centrifuges. Another source verifying that nuclear is very low carbon include [2] (which is a writeup for [3]). Tell me nuclear is expensive. Tell me you're concerned about accidents. Tell me what about the waste. But do not tell me nuclear is not low carbon. This is an absolutely unjustifiable belief propagated in public almost exclusively by institutional anti-nuclear organizations with a long and storied history of using incorrect information to make nuclear look bad. The real clincher to this argument is that we all agree there are no direct carbon emissions in fission. Splitting uranium makes no CO₂. So it's all lifecycle stuff. And in a 100% nuclear future, 100% of the mining, transportation (electrified), enrichment, etc. would be nuclear powered and so the carbon emissions would be literally 0. Same can be said for all other non-combustion sources. [1] https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5... [2] https://www.carbonbrief.org/solar-wind-nuclear-amazingly-low-carbon-footprints https://www.carbonbrief.org/solar-wind-nuclear-amazingly-low... [3] https://www.nature.com/articles/s41560-017-0032-9 https://www.nature.com/articles/s41560-017-0032-9 [4] https://whatisnuclear.com/img/lifecycle-carbon-emissions-300dpi.png https://whatisnuclear.com/img/lifecycle-carbon-emissions-300... (plot of data from [1]) > Furthermore, the massive risks of nuclear are inescapable for any right-thinking person. Furthermore, the almost eternal nuclear waste problem is still there and still has not been solved. That is the story at least. Fortunately we have scientific methods to help prevent us from fooling ourselves even when things are postulated that seem wrong. The actual fact is that nuclear is way safer than mainstream energy sources (gas, biofuel, oil, coal), and is perfectly on par with wind and solar. If this sounds crazy, please dig into the data! I admit it is surprising, but it is true. When you look at the data [5], nuclear is actually amazingly safe. So much so, that it's irrational even in the face of nuclear accidents to not shut down all fossil and replace it with nuclear from a public health perspective. This is because the toll of air pollution (both from fossil and biofuel) kills about 8M people every single year. I invite everyone to read the WHO reports on the impact of Chernobyl and compare with 8 Million deaths per year and tell me who's right-thinking! [5] https://ourworldindata.org/safest-sources-of-energy https://ourworldindata.org/safest-sources-of-energy > Because gas can be used to compensate when there is no wind and no sun. Yeah except gas emits 490 gCO₂-eq/kWh when the wind is not blowing and sun is not shining and that is wholly incompatible with solving climate change, even if we cover the whole country with wind, solar, and gas plants. With nuclear you get 0 carbon 100% of the time in any geography or season. Check electricitymap.org [6] for live emissions data and take a look at nuclear-heavy ontario and france compared to germany for real-world live proof of this. [6] https://www.electricitymap.org/ https://www.electricitymap.org/ Lastly, nuclear waste is a solved problem already. Did you know that zero people have been injured or killed by stored nuclear waste in dry casks (which is where we put them now)? You can walk right up to them [7]. We have a long-term solution like Onkalo [8] but even in the interim it's crazy to not build zero carbon energy even though we have properly handled commercial nuclear waste for 70 years. Again, remember that our current energy systems today are killing 8 million people per year. [7] https://www.youtube.com/watch?v=EUvvIzH2W6g https://www.youtube.com/watch?v=EUvvIzH2W6g [8] http://www.posiva.fi/en/final_disposal/onkalo http://www.posiva.fi/en/final_disposal/onkalo
Reason077 6y ago
> "Buffett believes that huge growth of cheap and crazy-popular wind and solar generators will continue to be directly correlated with a massive expansion of fracked natural gas" But this is not actually true, at least in the UK's experience. Britain's renewables have expanded massively in the last 10 years, allowing almost all coal power plants to close and grid carbon emissions to be cut by over 60%. Britain still leans heavily on natural gas generation during times when the sun isn't shining and the wind isn't blowing. However, the quantity of natural gas used has declined as well. Natural gas generation may remain profitable, because wholesale power prices rise when generation is scarce. But because natural gas power plants are being used less often, gas consumption and carbon emissions still decline.
- acidburnNSA 6y ago
  The UK built lots of plant biomass, and generates more electricity from it than solar. The capacity factor of these has dropped to 62%, indicating that they are load following with biomass. Unfortunately, even though biomass is renewable and counts as such in poorly designed energy policies, it uses combustion and causes significant air pollution (worse than gas) as well as high carbon concentration in the atmosphere, which causes global warming (on par with gas). Worse still, biomass used lots of land and competes with food production. Gas is arguably better for the environment than biomass. So yeah you're right. I should change the statement to say either gas or biomass or some other destructive combustion rises with renewables.
  - Reason077 6y ago
    Yes, biomass (supplying 7.0% of UK demand in the past 12 months) is a bit bigger than solar (4.5%). But both are relatively minor compared to wind generation at 23.8%. Wind has also overtaken nuclear (18.3%) to become the 2nd largest electricity source behind gas (34.0%). However, there is now a ban on subsidies for new UK biomass plants or conversions. So it is very unlikely that biomass will grow significantly in the coming years. Solar and wind, however, are still growing fast - and many of these projects are being built unsubsidised! Even projects that do receive contract for difference (CfD) subsidies, such as offshore wind farms, are receiving far lower strike prices compared to nuclear. Also, solar generation is concentrated during the day, closely matching the peak grid demand period. So despite being smaller in total generation compared to biomass, it's significance to the grid is disproportionately higher. Biomass generation typically acts as a baseload spread out over 24 hours - generating, and receiving subsidies, even in the middle of the night when it's not really needed. Your criticisms of biomass are valid, except that biomass for UK power plants consists mostly of wood pellets. Forests do not really compete with food production unless you are advocating forest clearance for food production! Unlike fossil fuels, biomass also does not cause "high carbon concentration in the atmosphere", except insofar as fossil fuels are consumed in the production and transport of that biomass.
SEJeff 6y ago
The big wildcard here is massive stationary storage, such as Tesla’s megapacks. They’re contracted to start on a 1MWh project with PG&E in California this year (Moss Landing). Renewables with stationary storage, in some cases, kill the economics for these “peaker plants”.

inetknght 6y ago

> To me this signals that Buffett believes > it appears that the public simply is not interested I'm not sure I agree. I'd say that it appears that Warren Buffet is not interested. I think the public is interested but can't afford the investment.

acidburnNSA 6y ago
I guess I'm thinking Buffett's lack of interest is related to the public's lack of interest at the current price point. On June 23, a Pew Research poll about energy preference came out. Nuclear did relatively poorly compared to renewables but, to your point, it did beat out most fossil-based solutions (barely). [1] https://www.pewresearch.org/science/2020/06/23/two-thirds-of-americans-think-government-should-do-more-on-climate/ https://www.pewresearch.org/science/2020/06/23/two-thirds-of...
- tankenmate 6y ago
  But the real issue if the how much the transmission providers are willing to pay. This market is open to all generators of an acceptable size who have passed govt. certification. In most countries this market is an auction in various sized time blocks (from months long down to a few hours). Obviously the price of solar and wind are lower than coal in a lot of localities, and in some are even lower than natural gas. And what's more for solar once it is in place it has miniscule opex, so almost any price above zero will produce net revenue. Natural gas will find it hard to compete with this in even a few years time. Having said that in the US approx 30% of natural gas is used in electricity production. Even though it is a minority of end use market share it will still affect prices. So I'd say if Buffett got it at a 30% discount or more he should be OK, a lesser discount may be problematic.

toomuchtodo 6y ago

While I don’t think Buffett is going to live long enough to see if this bet pays off, it’s reasonable that this natural gas play is going to fall flat considering renewables uptake and the cost decline curve of battery storage. This is without even discussing that many jurisdictions are considering or are starting to ban natural gas distribution to residences. After coal is driven out for electricity and heating, climate advocates and policy makers will be coming after natural gas next (and rightfully so if we intend to limit total carbon emissions). It’s not quite as “dumb money” as SoftBank, but very similar to T Boone Pickens’ natural gas play. Dominion sees the writing on the wall and found a greater fool. http://pickensplan.com/the-plan/natural-gas/ http://pickensplan.com/the-plan/natural-gas/ https://www.utilitydive.com/news/utilities-dont-see-stranded-assets-as-a-top-risk-should-they/572246/ https://www.utilitydive.com/news/utilities-dont-see-stranded... ("We get approached a lot about buying gas plants in the U.S. — I wouldn't touch one ... In a lot of these [jurisdictions] it's the next coal, and I think it's coming quicker than we think." — Ken Hartwick, President and CEO, Ontario Power Generation) https://www.utilitydive.com/news/renewables-storage-poised-to-undercut-natural-gas-prices-increase-strande/562674/ https://www.utilitydive.com/news/renewables-storage-poised-t... (“If all proposed gas plants are built, 70% of those investments will be rendered uneconomic by 2035, according to the Rocky Mountain Institute“)

epistasis 6y ago
I agree, in that this seems like the wrong tech to back at this time. However, I do wonder if these pipelines could be transitioned to something like HVDC; rip out the pipe and use the right of way for an entirely different, safer purpose that will have tremendous value in the future. Building new transmission is unbelievably difficult in this age, and I think most of the opportunities for doing so will require repurposing existing, defunct infrastructure.
- toomuchtodo 6y ago
  Underground HVDC is straightforward (supporting anywhere between 600MW and 1.5GW of capacity) and can be an effective replacement for above ground projects blocked by NIMBYs. More money, but doable, and in zero interest rate policy environments just borrow some more. You don’t even need to rip out existing pipes, you can leave them in the ground purged and unused. I would expect that you’ll also see “repowering” projects where aging overhead AC transmission lines are upgraded to more efficient, higher capacity HVDC.

twsttest 6y ago

A significant portion of the public is interested, but crucially those who have influence presently are not. The post-carbon energy debate is dominated by green energy advocates who are fully invested in wind and solar to the exclusion of nuclear. Their militant anti nuclear views have been accepted by the public due to reactor meltdowns and nuclear's justifiably poor reputation. However I believe the debate is shifting. With increased public awareness of safe(er) modern reactor designs I think the public's fear of nuclear is receding which will lead to increased nuclear advocacy, especially among politicians who will view nuclear advocacy as a prudent middle ground that can win over people who are concerned about climate change but also uncomfortable supporting aggressively anti-nuclear environmentalists who have up until now been the face of climate change advocacy.

epistasis 6y ago

> low-material energy (i.e. energy with high power density) like nuclear Nuclear is not particularly dense, kilogram for kilogram, compared to something like solar. A reactor and containment and cooling require absolutely massive amounts of concrete and steel. And check out the size of the new SMRs that are being proposed; 1-10MW of an SMR isn't that tiny. I haven't run the masses at all like I have with solar and 1GW plants, since I'm not very familiar with wind turbines, but I wouldn't be surprised at all if wind and SMRs were within an order of magnitude of mass per MW. Nuclear gets tons of energy out of small masses of fuel, but the rest of the infrastructure isn't so small, especially compared to solar which has massless fuel.

acidburnNSA 6y ago
They are indeed massive, but a gigawatt is a lot of power! In the balance, nuclear uses a vastly less raw material and land per energy than almost all other energy sources. The DOE 2015 quadrennial report shows data on things like this, and here is a plot of the data (with citation) [1]. Where are you getting your info? E=MC² from the fuel does indeed carry over into incredibly low land, raw material, and waste footprints in nuclear. That's what's so cool about it. [1] https://images.squarespace-cdn.com/content/v1/56a45d683b0be33df885def6/1559929822962-FA47VAASFE2H053HDUQI/ke17ZwdGBToddI8pDm48kNvT88LknE-K9M4pGNO0Iqd7gQa3H78H3Y0txjaiv_0fDoOvxcdMmMKkDsyUqMSsMWxHk725yiiHCCLfrh8O1z5QPOohDIaIeljMHgDF5CVlOqpeNLcJ80NK65_fV7S1USOFn4xF8vTWDNAUBm5ducQhX-V3oVjSmr829Rco4W2Uo49ZdOtO_QXox0_W7i2zEA/The+Complete+Case+for+Nuclear+-+English.008.jpeg?format=1000w https://images.squarespace-cdn.com/content/v1/56a45d683b0be3... Edit: actual citation is table 10.4 in [2] on pg 390 of the pdf. That cites ref 52 which points to [3] from Argonne National Lab. Would be nice to find a better reference. [2] https://www.energy.gov/sites/prod/files/2017/03/f34/quadrennial-technology-review-2015_1.pdf https://www.energy.gov/sites/prod/files/2017/03/f34/quadrenn... [3] https://greet.es.anl.gov/ https://greet.es.anl.gov/ More info in here [4] [4] http://pubdocs.worldbank.org/en/961711588875536384/Minerals-for-Climate-Action-The-Mineral-Intensity-of-the-Clean-Energy-Transition.pdf http://pubdocs.worldbank.org/en/961711588875536384/Minerals-...
- _jal 6y ago
  > nuclear uses a vastly less [...] land per energy It really depends on which particular installation we're talking about, doesn't it? https://medium.com/social-innovation-japan/fukushimas-nuclear-exclusion-zone-7-years-on-5b1998a1d560 https://medium.com/social-innovation-japan/fukushimas-nuclea... There are some other ones occupying rather a lot of land as well...

pulse7 6y ago

"Fracked natural gas is certainly better " ... "way less deadly air pollution"... but way more water contamination by fracking chemicals...

acidburnNSA 6y ago
I've seen the video of the guy opening his faucet and lighting it up but I read somewhere that that was found to be biogenic, and that that kind of thing is actually really rare with fracking. Not an expert in this though so I could be wrong. Coal pollutes lots of water though so it seems hard to beat. Certainly fracking causes more fracking waste than coal, but I believe the overall environmental impact is less across the board.
- kube-system 6y ago
  I think a lot of people forget: 1) how bad well water often naturally is and 2) that it still exists. There is a reason why treated public water systems are such a foundational part of modern public health. I have family whose water is undrinkable, not due to man-made pollution, but due to high levels of natural minerals in their well. They rely on bottled water for human consumption. https://www.epa.gov/privatewells https://www.epa.gov/privatewells
kube-system 6y ago
Coal mining also often employs processes that pose the risk of water pollution. eg. https://en.wikipedia.org/wiki/Acid_mine_drainage https://en.wikipedia.org/wiki/Acid_mine_drainage The difference is that human activities can be changed through regulation. The chemical byproducts of a combustion reaction cannot.
- maliker 6y ago
  And then there are serious water pollution problems around the management of coal ash after the combustion process. E.g. https://en.wikipedia.org/wiki/Kingston_Fossil_Plant_coal_fly_ash_slurry_spill https://en.wikipedia.org/wiki/Kingston_Fossil_Plant_coal_fly...

heavenlyblue 6y ago

To me it signals this company is undervalued

vmception 6y ago
Exactly, that's the only thing that matters in this calculus unless Berkshire Hathaway governance forces them to add additional factors into purchases in some industries.
all_blue_chucks 6y ago
To determine whether a company is undervalued you must have some prediction of future business prospects.
- marvin 6y ago
  Or have faith in the guy that's been the most successful investor in modern history, up until now.
  - cik 6y ago
    He's still been the most successful investor in modern history, including covid. It's a blip to him - and he's right. He's one of the few to consistently beat the S&P 500, and even so, he recommends just buying the index.
    - fiachamp 6y ago
      good luck buying the index in a zero interest rate policy world...see nikkei since 1990 for example performance
      - cik 6y ago
        A zero interest (or low) interest rate doesn't have to equal stagnation. The free flow of money could also kick start an entire generation of entrepreneurs, solely by reducing capital risk. The performance of the Nikkei is significantly more complicated than just a low interest rate. For example. the lack of productivity and population growth in Japan is another set of pieces that also impacts the rate of return.

vkou 6y ago

> I'm always advocating for 24/7 low-carbon, low-land, low-material energy (i.e. energy with high power density) like nuclear but it appears that the public simply is not interested. As a member of the public, I have never been asked where I want my electricity to come from, so my interest has little bearing on what actually gets built. The public may be asked to make a decision by proxy (R versus D), but that is only one of many decisions that get made, as a consequence of that choice.

acidburnNSA 6y ago
There are a lot of policies put in place that affect the energy markets that elected leaders are heavily involved in. For instance, there are production tax credits for wind. There are incentives for rooftop solar. There is talk of a carbon tax or cap and trade. There are debates about whether or not nuclear should be counted for or against clean energy targets. In the 1970s, there was massive legislation (the clean air act) that increased the costs of coal dramatically. These all greatly influence the mix of energy that gets built and are very tied to consumer preferences (if a little indirectly).
distances 6y ago
Can't you choose your electricity provider? I definitely check the electricity production type pie chart every time I switch providers.
- vkou 6y ago
  I have a choice between having the one regional electricity provider provide me with electricity, and having no electricity. If I owned a free-standing house, I could theoretically switch to rooftop solar, but it is uneconomical compared to utility solar.
  - distances 6y ago
    Right, then there's indeed quite little you can do directly.
- 6y ago

danans 6y ago

Buffett's utility holdings (i.e. PacifiCorp) are aggressively shutting down coal plants and ramping up their wind/solar capacity in their service territories. One perhaps far-fetched possibility here might be that he is vertically integrating the natgas based aspect of their utility business instead of buying natgas from another company while as you say dealing with the intermittency of renewables, although that would require some kind of merger with those utilities so that the natgas input could be provided at-cost to them.

cs702 6y ago
He owns both extensive utility operations and extensive transportation operations. Might as well own some natural gas assets too, if it can be acquired at the right price.

workingname 6y ago

I only see him valuing the pipelines themselves, and perhaps not as strong of a shift into absolving fossil fuels like everyone expects. Humans are slow to change and adapt, I mean look at coronavirus and masks in the US. Natural gas is great because of the low levels of emissions, the not so great aspect is fracking continuing to mess up peoples homes, i.e. flaming sinks. Those that are in control should advocate for the publics best interest imo.

truculent 6y ago
> look at coronavirus and masks in the US. Equally, look at coronavirus and masks in western Europe
- GEBBL 6y ago
  Do you mean to say we in Western Europe are wearing masks and have it right? Here, we are also struggling to get the message across that it needs to be worn.
  - mschuster91 6y ago
    We may be struggling, but nowhere near the levels seen in the US and Brazil. Many of us were shocked by the pictures of the military trucks carrying the dead in Italy.
  - truculent 6y ago
    Uptake in Northern Europe seems to be lower, but rapid change in Western Europe over the course of a couple of weeks/months: https://www.economist.com/graphic-detail/2020/07/08/face-off-over-face-masks-europes-latest-north-south-split https://www.economist.com/graphic-detail/2020/07/08/face-off...
acidburnNSA 6y ago
The not so great aspect of gas is that its a high carbon fossil fuel that causes global warming. 490 gCO2-eq/kWh is not even close to low. Low carbon sources have lifecycle emissions closer to 10.

reaperducer 6y ago

Maybe he's not interested in the natural gas for energy. Everything I know about natural gas came from visiting and energy museum, but from what I remember, natural gas is used to make hydrogen, plastics, fertilizer, certain types of animal foods, and even things like vitamins. At an elementary level, it's easy to imagine a world without natural gas because there are lots of other ways to make electricity. But it's harder to imagine a world without plastic.

mxschumacher 6y ago
~50% of us homes are heated with nat gas.

hristov 6y ago

First of all the assumption of nuclear being low carbon is really doubtful. Nuclear requires fuel and uranium mining is a very expensive and dirty process. The real carbon impact on nuclear depends largely on the quality of the uranium ore and for bad quality ores the impact maybe worse than natural gas. See here for more details. https://theecologist.org/2015/feb/05/false-solution-nuclear-power-not-low-carbon https://theecologist.org/2015/feb/05/false-solution-nuclear-... Furthermore, the massive risks of nuclear are inescapable for any right-thinking person. Furthermore, the almost eternal nuclear waste problem is still there and still has not been solved. Furthermore, even if gas is more carbon intensive it is better overall, because it allows for zero carbon generation like solar and wind to flourish. Because gas can be used to compensate when there is no wind and no sun. Nuclear is absolutely useless in these cases because it is very slow to start up and turn off. The fact that nuclear is "24/7" is not actually a positive thing when you want to to work with cheap solar/wind energy. Eventually we will develop suitable storage solutions but until then gas is a good interim solution.

acidburnNSA 6y ago
The myth of nuclear being not low-carbon has been wholly rejected by a large and significant meta-analysis of the IPCC itself, as clearly seen in Table A.III.2 in [1], which puts nuclear at 12 gCO₂-eq/kWh, the lowest on the list except for wind at 11. Solar is around 40. Natural gas is 490. Coal is 820. The data are plotted here [4] directly from that table. It's no surprise either. When uranium has 2,000,000x more energy per mass than any chemical, and when splitting atoms has nothing to do with carbon emissions, it's very difficult to make it high-carbon through lifecycle issues. I went deep with someone a while back on here who claims that nuclear was closer to 100 gCO₂/eq than the IPCC number of 12g CO₂-eq/kWh, and they realized they were using 1950s energy values for gaseous diffusion enrichment instead of much-more-efficient centrifuges. Another source verifying that nuclear is very low carbon include [2] (which is a writeup for [3]). Tell me nuclear is expensive. Tell me you're concerned about accidents. Tell me what about the waste. But do not tell me nuclear is not low carbon. This is an absolutely unjustifiable belief propagated in public almost exclusively by institutional anti-nuclear organizations with a long and storied history of using incorrect information to make nuclear look bad. The real clincher to this argument is that we all agree there are no direct carbon emissions in fission. Splitting uranium makes no CO₂. So it's all lifecycle stuff. And in a 100% nuclear future, 100% of the mining, transportation (electrified), enrichment, etc. would be nuclear powered and so the carbon emissions would be literally 0. Same can be said for all other non-combustion sources. [1] https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_annex-iii.pdf https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5... [2] https://www.carbonbrief.org/solar-wind-nuclear-amazingly-low-carbon-footprints https://www.carbonbrief.org/solar-wind-nuclear-amazingly-low... [3] https://www.nature.com/articles/s41560-017-0032-9 https://www.nature.com/articles/s41560-017-0032-9 [4] https://whatisnuclear.com/img/lifecycle-carbon-emissions-300dpi.png https://whatisnuclear.com/img/lifecycle-carbon-emissions-300... (plot of data from [1]) > Furthermore, the massive risks of nuclear are inescapable for any right-thinking person. Furthermore, the almost eternal nuclear waste problem is still there and still has not been solved. That is the story at least. Fortunately we have scientific methods to help prevent us from fooling ourselves even when things are postulated that seem wrong. The actual fact is that nuclear is way safer than mainstream energy sources (gas, biofuel, oil, coal), and is perfectly on par with wind and solar. If this sounds crazy, please dig into the data! I admit it is surprising, but it is true. When you look at the data [5], nuclear is actually amazingly safe. So much so, that it's irrational even in the face of nuclear accidents to not shut down all fossil and replace it with nuclear from a public health perspective. This is because the toll of air pollution (both from fossil and biofuel) kills about 8M people every single year. I invite everyone to read the WHO reports on the impact of Chernobyl and compare with 8 Million deaths per year and tell me who's right-thinking! [5] https://ourworldindata.org/safest-sources-of-energy https://ourworldindata.org/safest-sources-of-energy > Because gas can be used to compensate when there is no wind and no sun. Yeah except gas emits 490 gCO₂-eq/kWh when the wind is not blowing and sun is not shining and that is wholly incompatible with solving climate change, even if we cover the whole country with wind, solar, and gas plants. With nuclear you get 0 carbon 100% of the time in any geography or season. Check electricitymap.org [6] for live emissions data and take a look at nuclear-heavy ontario and france compared to germany for real-world live proof of this. [6] https://www.electricitymap.org/ https://www.electricitymap.org/ Lastly, nuclear waste is a solved problem already. Did you know that zero people have been injured or killed by stored nuclear waste in dry casks (which is where we put them now)? You can walk right up to them [7]. We have a long-term solution like Onkalo [8] but even in the interim it's crazy to not build zero carbon energy even though we have properly handled commercial nuclear waste for 70 years. Again, remember that our current energy systems today are killing 8 million people per year. [7] https://www.youtube.com/watch?v=EUvvIzH2W6g https://www.youtube.com/watch?v=EUvvIzH2W6g [8] http://www.posiva.fi/en/final_disposal/onkalo http://www.posiva.fi/en/final_disposal/onkalo

Reason077 6y ago

> "Buffett believes that huge growth of cheap and crazy-popular wind and solar generators will continue to be directly correlated with a massive expansion of fracked natural gas" But this is not actually true, at least in the UK's experience. Britain's renewables have expanded massively in the last 10 years, allowing almost all coal power plants to close and grid carbon emissions to be cut by over 60%. Britain still leans heavily on natural gas generation during times when the sun isn't shining and the wind isn't blowing. However, the quantity of natural gas used has declined as well. Natural gas generation may remain profitable, because wholesale power prices rise when generation is scarce. But because natural gas power plants are being used less often, gas consumption and carbon emissions still decline.

acidburnNSA 6y ago
The UK built lots of plant biomass, and generates more electricity from it than solar. The capacity factor of these has dropped to 62%, indicating that they are load following with biomass. Unfortunately, even though biomass is renewable and counts as such in poorly designed energy policies, it uses combustion and causes significant air pollution (worse than gas) as well as high carbon concentration in the atmosphere, which causes global warming (on par with gas). Worse still, biomass used lots of land and competes with food production. Gas is arguably better for the environment than biomass. So yeah you're right. I should change the statement to say either gas or biomass or some other destructive combustion rises with renewables.
- Reason077 6y ago
  Yes, biomass (supplying 7.0% of UK demand in the past 12 months) is a bit bigger than solar (4.5%). But both are relatively minor compared to wind generation at 23.8%. Wind has also overtaken nuclear (18.3%) to become the 2nd largest electricity source behind gas (34.0%). However, there is now a ban on subsidies for new UK biomass plants or conversions. So it is very unlikely that biomass will grow significantly in the coming years. Solar and wind, however, are still growing fast - and many of these projects are being built unsubsidised! Even projects that do receive contract for difference (CfD) subsidies, such as offshore wind farms, are receiving far lower strike prices compared to nuclear. Also, solar generation is concentrated during the day, closely matching the peak grid demand period. So despite being smaller in total generation compared to biomass, it's significance to the grid is disproportionately higher. Biomass generation typically acts as a baseload spread out over 24 hours - generating, and receiving subsidies, even in the middle of the night when it's not really needed. Your criticisms of biomass are valid, except that biomass for UK power plants consists mostly of wood pellets. Forests do not really compete with food production unless you are advocating forest clearance for food production! Unlike fossil fuels, biomass also does not cause "high carbon concentration in the atmosphere", except insofar as fossil fuels are consumed in the production and transport of that biomass.

SEJeff 6y ago

The big wildcard here is massive stationary storage, such as Tesla’s megapacks. They’re contracted to start on a 1MWh project with PG&E in California this year (Moss Landing). Renewables with stationary storage, in some cases, kill the economics for these “peaker plants”.