4 ms·

The three options in the article are accurate (tax, compete, or capture). I work in solar, and the consensus in the industry is that #2 is happening first (sola

by diafygi 12y ago

The three options in the article are accurate (tax, compete, or capture). I work in solar, and the consensus in the industry is that #2 is happening first (solar and wind are currently replacing coal). #1 will start to happen over the next few decades as the effects of climate change have more of an impact on society (e.g. the California drought). #3 won't likely happen since #1 will probably be cheaper. Anyway, I'm a chemical engineer from UT-Austin, so most of my graduating class went into oil. I have a standing $100 bet with two of them that they will not retire in the oil industry. Finally, I don't understand why more entrepreneurs don't do startups in energy. 87% of the world energy sources will have to change in the next 35 years. To most, that sounds scary. However, to an entrepreneur like me, that sounds like a huge ceiling.

msandford 12y ago
> I have a standing $100 bet with two of them that they will not retire in the oil industry. I'm also in oil & gas right now and I suspect that you're going to lose, though not because the industry is going to grow. It's going to shrink strictly based on out-of-the-ground production. But the oil companies aren't huge, they're gigantic. And they're not going to just roll over and die. If tomorrow someone gets a working LFTR going you can be sure that all the majors are going to spend a LOT of money trying to buy said company and scale it up. And the oil companies already own tremendous amounts of assets re: liquid fuels so they'd just start plopping reactors down in the middle of their plants and start producing DME (for diesel) or whatever the gas equivalent is out of various feedstocks. It'd take a decade or two to finally make the transition, but I really think that's where things are going. The oil companies regularly spend billions getting leases on land, drilling, production assets, etc. To spend $10b (or $100b even) on buying a 'safe nuclear' technology to avoid going out of business I suspect wouldn't generate too many waves. So they'll be sort-of reinvented, but still largely themselves. The majors aren't necessarily oil companies anymore, but energy companies. We're going to see them slowly change or die, but I suspect most will transition successfully just because they have so much money under "management" that it'll be hard to screw up too badly.
- falsestprophet 12y ago
  Energy in liquid form comes at a large premium to energy in other forms (coal, gas, electricity) because of it's utility for transportation. As batteries become cheaper, the value of liquid fuels will decrease. At some point, some current oil production is going to cease to be economically viable. This is likely even without carbon taxes and regulation -- which are possible and surely won't help petroleum industry. LFTR videos are popular on social media, but there are many technologies that could produce superior fission plants to what we have now [1]. And thorium isn't required for molten salt reactors like LFTR in any case [2]. You may be interested in these designs. [1] http://en.wikipedia.org/wiki/Nuclear_reactor#Current_technologies http://en.wikipedia.org/wiki/Nuclear_reactor#Current_technol... [2] http://en.wikipedia.org/wiki/Molten_salt_reactor http://en.wikipedia.org/wiki/Molten_salt_reactor
- guelo 12y ago
  That wouldn't be the oil industry anymore.
  - msandford 12y ago
    > That wouldn't be the oil industry anymore. What is the oil industry then? I mean, there are probably a bunch of different definitions. The "oil industry" does a lot of stuff. 1. explores for oil 2. obtains mineral rights to the oil it suspects is in the ground 3. does test drilling to determine if oil is in fact there 4. does production drilling to make it feasible to extract any oil it does find 5. sets up production equipment to extract the oil from the ground 6. establishes a logistics chain to move the crude oil coming out of the ground to a refinery (truck, train, pipeline, etc) 7. builds and maintains many-multi-billion dollar refineries 8. uses said refineries to turn crude oil into a multitude of products like various gasses, butane, naptha, grades of gasoline, diesel, jet fuel, greases and lubricants, waxes and various other byproducts 9. establishes supply lines to ship finished products to various markets domestically and internationally 10. trades in the energy markets to ensure that prices across the world properly reflect transport and other costs (arbitrage by virtue of known internal costs) 11. develops new equipment, techniques and strategies to make any of the above mentioned things more efficient, cheaper, easier, etc So while I agree that 1-5 might end up changing, that's far from the entirety of "the oil industry" and thus I think my statement isn't entirely wrong.
marcosdumay 12y ago
> Finally, I don't understand why more entrepreneurs don't do startups in energy. The risk vs. rewards isn't as good as it looks like. First, energy is one of those hightly regulated fields, where outsiders face hell on Earth. Then, energy is normaly a market where huge investiments have tremendous economics of scale and dominate the market. Finally, even research in energy takes big-to-huge initial investiments, where "big" is already way outside of normal people budgets. Yes, if somebody comes with a way to make anything (production, storage, transmission, even colaboration) cheap on this market, he'll probably get rich. But any product that isn't completely revolutionary will be completely destroyed.
ci5er 12y ago
Lots of people do energy-related start-ups. You probably won't find a lot of them in the halls of Y-combinator or on Hacker News.
- username223 12y ago
  > Lots of people do energy-related start-ups. Can you point to some? I'd love to help them in some way. > You probably won't find a lot of them in the halls of Y-combinator or on Hacker News. Yep. This business is about 20- and 30-somethings flipping their "social pet belfie" companies for as much as they can get in the next couple of years. Most of them don't care about 10-20 years from now, much less 50-100, and will be dead by the time that sea level rise drowns most of Florida and glacier melt makes Canada unrecognizable.
  - ci5er 12y ago
    > Can you point to some? Altarock, Zeep, Achates, Biofuelbox, yada yada ... There are like ... a lot. What is your particular interest? > I'd love to help them in some way. What type of thing can you contribute? I may or may not be able to provide an intro to something you are interested in. Unfortunately, the ones where I have any direct contribution are (oddly) both stealth-ey and large-ish and off to the races already. That said, depending on what you are into, I'd be happy to put you in contact with them, if there appears to be a fit.
    - username223 12y ago
      > What type of thing can you contribute? I do statistics and HPC (C/C++/Fortran), and know some good CFD people. If that matters, let's talk off-forum. HN apparently doesn't do that, but I can set up the email if you want.
      - ci5er 12y ago
        If I understand the system correctly, you can find my email address (for now) in my profile. If you can't see it, you will need to guide me.
codingdave 12y ago
Energy startups are way out of the scale of what most entrepreneurs are capable of. It is not just building a new turbine/panel/generator/mousetrap/whatever. It is scaling it to be commercially viable, and dealing with massive regulatory issues and politics. You might find an angel investor to help you build a prototype, but actually building a full scale implementation is not only greater in scale than most VCs want to handle, but the payback is going to happen over decades, which is not in line with most investor's strategies. I did look into doing an energy startup a few years back. We had a prototype built, tested, and in operations, so it was at the point where most people thought it would be easy to launch it. But the investors who were interested in funding projects stared that they wanted us to do at least $50 million dollar projects before they even wanted to talk to us. Anything below that was small potatoes. Now, maybe we were just talking to the wrong people... we ended up not pursing the projects at the end of it all. But unless you have had exposure to the internal workings of the energy industry, you really don't grasp the massive scale of it all.
gumby 12y ago
> Finally, I don't understand why more entrepreneurs don't do startups in energy. Having done one I can tell you why I wouldn't do another. Yes, the energy business is huge, but in part its huge because there is a lot of infrastructure, path dependency, and economy of scale involved. It's hard to make a meaningful change against that, especially since the margins are low so there's not a lot of room for a classical "Christiansen" disruptor. Typically the new entrant's cost is higher since it can't take advantage of the highly depreciated existing infrastructure. SO you have to get established in specialized markets which are by definition marginal. Finally, and again because the markets are so huge, policy (and lobbying) is a huge influence, and startups simply can't play in those arenas. A good example of all this is coal: new coal plants aren't being built in the US and even the coal minors don't want their kids to go into coal (most don't anyway), yet "attack on coal is an attack on America" is a significant plank on at least one of the major party's platform.
kuni-toko-tachi 12y ago
The drought in California has nothing to do with "climate change" which is a political term designed to manipulate and control gullible people. California has gone through periods of drought countless times before. Let's stop this nonsense whereby every single common weather event is used to serve the purposes of this political term. Enough stupidity.

by diafygi 12y ago

msandford 12y ago

> I have a standing $100 bet with two of them that they will not retire in the oil industry. I'm also in oil & gas right now and I suspect that you're going to lose, though not because the industry is going to grow. It's going to shrink strictly based on out-of-the-ground production. But the oil companies aren't huge, they're gigantic. And they're not going to just roll over and die. If tomorrow someone gets a working LFTR going you can be sure that all the majors are going to spend a LOT of money trying to buy said company and scale it up. And the oil companies already own tremendous amounts of assets re: liquid fuels so they'd just start plopping reactors down in the middle of their plants and start producing DME (for diesel) or whatever the gas equivalent is out of various feedstocks. It'd take a decade or two to finally make the transition, but I really think that's where things are going. The oil companies regularly spend billions getting leases on land, drilling, production assets, etc. To spend $10b (or $100b even) on buying a 'safe nuclear' technology to avoid going out of business I suspect wouldn't generate too many waves. So they'll be sort-of reinvented, but still largely themselves. The majors aren't necessarily oil companies anymore, but energy companies. We're going to see them slowly change or die, but I suspect most will transition successfully just because they have so much money under "management" that it'll be hard to screw up too badly.

falsestprophet 12y ago
Energy in liquid form comes at a large premium to energy in other forms (coal, gas, electricity) because of it's utility for transportation. As batteries become cheaper, the value of liquid fuels will decrease. At some point, some current oil production is going to cease to be economically viable. This is likely even without carbon taxes and regulation -- which are possible and surely won't help petroleum industry. LFTR videos are popular on social media, but there are many technologies that could produce superior fission plants to what we have now [1]. And thorium isn't required for molten salt reactors like LFTR in any case [2]. You may be interested in these designs. [1] http://en.wikipedia.org/wiki/Nuclear_reactor#Current_technologies http://en.wikipedia.org/wiki/Nuclear_reactor#Current_technol... [2] http://en.wikipedia.org/wiki/Molten_salt_reactor http://en.wikipedia.org/wiki/Molten_salt_reactor
guelo 12y ago
That wouldn't be the oil industry anymore.
- msandford 12y ago
  > That wouldn't be the oil industry anymore. What is the oil industry then? I mean, there are probably a bunch of different definitions. The "oil industry" does a lot of stuff. 1. explores for oil 2. obtains mineral rights to the oil it suspects is in the ground 3. does test drilling to determine if oil is in fact there 4. does production drilling to make it feasible to extract any oil it does find 5. sets up production equipment to extract the oil from the ground 6. establishes a logistics chain to move the crude oil coming out of the ground to a refinery (truck, train, pipeline, etc) 7. builds and maintains many-multi-billion dollar refineries 8. uses said refineries to turn crude oil into a multitude of products like various gasses, butane, naptha, grades of gasoline, diesel, jet fuel, greases and lubricants, waxes and various other byproducts 9. establishes supply lines to ship finished products to various markets domestically and internationally 10. trades in the energy markets to ensure that prices across the world properly reflect transport and other costs (arbitrage by virtue of known internal costs) 11. develops new equipment, techniques and strategies to make any of the above mentioned things more efficient, cheaper, easier, etc So while I agree that 1-5 might end up changing, that's far from the entirety of "the oil industry" and thus I think my statement isn't entirely wrong.

marcosdumay 12y ago

> Finally, I don't understand why more entrepreneurs don't do startups in energy. The risk vs. rewards isn't as good as it looks like. First, energy is one of those hightly regulated fields, where outsiders face hell on Earth. Then, energy is normaly a market where huge investiments have tremendous economics of scale and dominate the market. Finally, even research in energy takes big-to-huge initial investiments, where "big" is already way outside of normal people budgets. Yes, if somebody comes with a way to make anything (production, storage, transmission, even colaboration) cheap on this market, he'll probably get rich. But any product that isn't completely revolutionary will be completely destroyed.

ci5er 12y ago

Lots of people do energy-related start-ups. You probably won't find a lot of them in the halls of Y-combinator or on Hacker News.

username223 12y ago
> Lots of people do energy-related start-ups. Can you point to some? I'd love to help them in some way. > You probably won't find a lot of them in the halls of Y-combinator or on Hacker News. Yep. This business is about 20- and 30-somethings flipping their "social pet belfie" companies for as much as they can get in the next couple of years. Most of them don't care about 10-20 years from now, much less 50-100, and will be dead by the time that sea level rise drowns most of Florida and glacier melt makes Canada unrecognizable.
- ci5er 12y ago
  > Can you point to some? Altarock, Zeep, Achates, Biofuelbox, yada yada ... There are like ... a lot. What is your particular interest? > I'd love to help them in some way. What type of thing can you contribute? I may or may not be able to provide an intro to something you are interested in. Unfortunately, the ones where I have any direct contribution are (oddly) both stealth-ey and large-ish and off to the races already. That said, depending on what you are into, I'd be happy to put you in contact with them, if there appears to be a fit.
  - username223 12y ago
    > What type of thing can you contribute? I do statistics and HPC (C/C++/Fortran), and know some good CFD people. If that matters, let's talk off-forum. HN apparently doesn't do that, but I can set up the email if you want.
    - ci5er 12y ago
      If I understand the system correctly, you can find my email address (for now) in my profile. If you can't see it, you will need to guide me.

codingdave 12y ago

Energy startups are way out of the scale of what most entrepreneurs are capable of. It is not just building a new turbine/panel/generator/mousetrap/whatever. It is scaling it to be commercially viable, and dealing with massive regulatory issues and politics. You might find an angel investor to help you build a prototype, but actually building a full scale implementation is not only greater in scale than most VCs want to handle, but the payback is going to happen over decades, which is not in line with most investor's strategies. I did look into doing an energy startup a few years back. We had a prototype built, tested, and in operations, so it was at the point where most people thought it would be easy to launch it. But the investors who were interested in funding projects stared that they wanted us to do at least $50 million dollar projects before they even wanted to talk to us. Anything below that was small potatoes. Now, maybe we were just talking to the wrong people... we ended up not pursing the projects at the end of it all. But unless you have had exposure to the internal workings of the energy industry, you really don't grasp the massive scale of it all.

gumby 12y ago

> Finally, I don't understand why more entrepreneurs don't do startups in energy. Having done one I can tell you why I wouldn't do another. Yes, the energy business is huge, but in part its huge because there is a lot of infrastructure, path dependency, and economy of scale involved. It's hard to make a meaningful change against that, especially since the margins are low so there's not a lot of room for a classical "Christiansen" disruptor. Typically the new entrant's cost is higher since it can't take advantage of the highly depreciated existing infrastructure. SO you have to get established in specialized markets which are by definition marginal. Finally, and again because the markets are so huge, policy (and lobbying) is a huge influence, and startups simply can't play in those arenas. A good example of all this is coal: new coal plants aren't being built in the US and even the coal minors don't want their kids to go into coal (most don't anyway), yet "attack on coal is an attack on America" is a significant plank on at least one of the major party's platform.

kuni-toko-tachi 12y ago

The drought in California has nothing to do with "climate change" which is a political term designed to manipulate and control gullible people. California has gone through periods of drought countless times before. Let's stop this nonsense whereby every single common weather event is used to serve the purposes of this political term. Enough stupidity.