Excellent article! Three super conclusions from this article:
1. "We believe this is consistent with our long-held view that biofuels are not a serious competitor to petroleum products due to the poor, unsubsidized economics of most (all?) biofuels, including corn ethanol, biodiesel, and renewable diesel."
Biofuels are hopeless losers. These industries only exist by the fleecing of taxpayers and capturing the police power of the state to decide winners and losers.
2. "Biofuels growth in the United States and Europe we believe is entirely due to it being required by law. China, to its credit, has not followed the US or Europe down this road."
I repeat: Biofuels are hopeless losers. These industries only exist by the fleecing of taxpayers and capturing the police power of the state to decide winners and losers.
3. "As we have long believed, China would much rather have coal-fired EVs (electric vehicles) than USA/Saudi/Russian oil-fired ICE (internal combustion engine) vehicles."
"China is now overwhelmingly—and it’s not a close call—the king of coal markets (Exhibit 4). It has accounted for just over 100% of global growth over the past 20 years and is now 56% of global coal consumption. Coal is an abundant, inexpensive domestic resource that allows for dispatchable power generation, in addition to supporting domestic jobs and investment opportunities."
World coal consumption has a very bright future. The West, especially Europe, imperils its own prosperity by demonizing coal. The world needs to consume massively more energy if the world economy is to continue to grow.
Thank you Arjun for reiterating 'super vol' not 'super cycle', I, for one, need a reminder whenever I get particularly bullish!
Question: I know you have addressed this in the past, but what is your overall view of US shale production? That it will remain strong for many years, or that US shale production tapers at some point?
Hi Investor, thank you as always for your comments and engagement. My view is that at $65-$85/bbl WTI, shale can grind out 100,000-300,000 b/d of growth per year for at least the next 5 years or so (i.e., 2020s). We shall see longer term. A much higher oil price could elicit more supply. There likely is downside risk from a lower price.
Thanks Arjun. You know that I always look forward to reading your views. I think that you meant “peek into China” not “peak”. Good luck with the club championship. Channel Scottie and you’ll do well.
Excellent article! Three super conclusions from this article:
1. "We believe this is consistent with our long-held view that biofuels are not a serious competitor to petroleum products due to the poor, unsubsidized economics of most (all?) biofuels, including corn ethanol, biodiesel, and renewable diesel."
Biofuels are hopeless losers. These industries only exist by the fleecing of taxpayers and capturing the police power of the state to decide winners and losers.
2. "Biofuels growth in the United States and Europe we believe is entirely due to it being required by law. China, to its credit, has not followed the US or Europe down this road."
I repeat: Biofuels are hopeless losers. These industries only exist by the fleecing of taxpayers and capturing the police power of the state to decide winners and losers.
3. "As we have long believed, China would much rather have coal-fired EVs (electric vehicles) than USA/Saudi/Russian oil-fired ICE (internal combustion engine) vehicles."
"China is now overwhelmingly—and it’s not a close call—the king of coal markets (Exhibit 4). It has accounted for just over 100% of global growth over the past 20 years and is now 56% of global coal consumption. Coal is an abundant, inexpensive domestic resource that allows for dispatchable power generation, in addition to supporting domestic jobs and investment opportunities."
World coal consumption has a very bright future. The West, especially Europe, imperils its own prosperity by demonizing coal. The world needs to consume massively more energy if the world economy is to continue to grow.
Thank you Tom!
Thank you Arjun for reiterating 'super vol' not 'super cycle', I, for one, need a reminder whenever I get particularly bullish!
Question: I know you have addressed this in the past, but what is your overall view of US shale production? That it will remain strong for many years, or that US shale production tapers at some point?
Best,
J
Hi Investor, thank you as always for your comments and engagement. My view is that at $65-$85/bbl WTI, shale can grind out 100,000-300,000 b/d of growth per year for at least the next 5 years or so (i.e., 2020s). We shall see longer term. A much higher oil price could elicit more supply. There likely is downside risk from a lower price.
Excellent article I also enjoy reading it not listening ,you also included very important side notes golf and dogs !
thank you John!
Thanks Arjun. You know that I always look forward to reading your views. I think that you meant “peek into China” not “peak”. Good luck with the club championship. Channel Scottie and you’ll do well.
Freudian slip! and thank you
Thanks for this. And for any other readers like me who can't tolerate podcasts, thanks for making it in text.
thank you. and you're welcome! try my best to alternate formats.