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I'll still wait a few months to buy, but the green energy changes will improve everything. No more oil/gas dependencies!

by rurban 4y ago

peteradio 4y ago
Is this sarcasm? Few months before green energy turns the ship around? Oil/gas is the backbone of most economy, dare say we will remain dependent.
- epistasis 4y ago
  I think the poster is saying he expects the stock market to fall a few more months before turning around. Not that green energy will complete its transition in a few months. If you think oil/gas will demand the backbone, you ask yourself why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices. Oil and gas, and their investors, are planning for their phase out, and nobody wants to be holding on to a new asset that has a lifetime of 10-20 years but won't have value after five. Oil and gas companies and investors know that fossil fuels are on the way out, it surprised me that the general public doesn't know this.
  - peteradio 4y ago
    > why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices Because its a short-lived blip? Didn't we just have record lows less than 2-years ago?
    - epistasis 4y ago
      When there's an influx of cash like now, it's usually an ideal time to invest that money in new production because you have the cash in hand. General consensus is that new development should be small and only in a few types of projects, due to the transition under way. For example see this BCG report (PDF): https://web-assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e8/bcg-oil-and-gas-investment-in-the-new-risk-environment-dec-2020.pdf https://web-assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e...
epistasis 4y ago
I think more important than removing dependencies on oil/gas is that energy will be much cheaper, reducing the cost of everything. One other aspect of the IRA is that it heavily incentivizes building the new manufacturing capacity in the US. If US manufacturing is not competitive with other parts of the world, this could be less efficient than a world where the best manufacturers do more of it. So it has the potential to lower growth rates, but personally I think the tech advances for cost reduction of solar/wind/storage will likely be so massive as to overwhelm any potential US-based inefficiencies. In order to correct it, we could tie some of these benefits back to the manufacturers being able to compete on the global market; I.e. if they can't export X% of their product successfully in a competitive market, then the subsidies taper out. But we will see.

I'll still wait a few months to buy, but the green energy changes will improve everything. No more oil/gas dependencies!

by rurban 4y ago

I'll still wait a few months to buy, but the green energy changes will improve everything. No more oil/gas dependencies!

peteradio 4y ago

Is this sarcasm? Few months before green energy turns the ship around? Oil/gas is the backbone of most economy, dare say we will remain dependent.

epistasis 4y ago
I think the poster is saying he expects the stock market to fall a few more months before turning around. Not that green energy will complete its transition in a few months. If you think oil/gas will demand the backbone, you ask yourself why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices. Oil and gas, and their investors, are planning for their phase out, and nobody wants to be holding on to a new asset that has a lifetime of 10-20 years but won't have value after five. Oil and gas companies and investors know that fossil fuels are on the way out, it surprised me that the general public doesn't know this.
- peteradio 4y ago
  > why none of the oil and gas majors are drastically expanding their production capacity during this time of high prices Because its a short-lived blip? Didn't we just have record lows less than 2-years ago?
  - epistasis 4y ago
    When there's an influx of cash like now, it's usually an ideal time to invest that money in new production because you have the cash in hand. General consensus is that new development should be small and only in a few types of projects, due to the transition under way. For example see this BCG report (PDF): https://web-assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e8/bcg-oil-and-gas-investment-in-the-new-risk-environment-dec-2020.pdf https://web-assets.bcg.com/5e/73/dcd6e1544ba2a964e6c082d684e...

epistasis 4y ago

I think more important than removing dependencies on oil/gas is that energy will be much cheaper, reducing the cost of everything. One other aspect of the IRA is that it heavily incentivizes building the new manufacturing capacity in the US. If US manufacturing is not competitive with other parts of the world, this could be less efficient than a world where the best manufacturers do more of it. So it has the potential to lower growth rates, but personally I think the tech advances for cost reduction of solar/wind/storage will likely be so massive as to overwhelm any potential US-based inefficiencies. In order to correct it, we could tie some of these benefits back to the manufacturers being able to compete on the global market; I.e. if they can't export X% of their product successfully in a competitive market, then the subsidies taper out. But we will see.