In your comparison of the share price performance of ICLN and IXE, it would have been instructive to add an arguably better comparison to IXE; COPX, the largest copper miner ETF. As your old colleague Jeff Currie has pointed out until he is blue in the face, copper is the new oil in that it is the commodity most fundamental to the energy transition and electrification trend.
Will oil close the gap with copper by following the price up? Or is this time something different going on? I would argue that from a long term perspective, copper has better long term demand drivers based on the energy transition and the electrification push AND a much more constrained supply outlook... Maybe at some point something analogous to the shale revolution will happen in the copper market (like the new leaching technologies being rolled out by Freeport McMoran and others) , but for the time being, there looks like a pretty insurmountable supply shortfall in the very near future.
Furthermore, copper demand is actually displacing oil and gas demand, as EVs claw market share away from ICE vehicles and solar and wind power generation claws market share away from coal and gas. According to the EIA in August, 80% of all new electricity capacity added in the the US in first half of 2024 was solar and battery storage. At this point, copper is basically eating oil and gas's lunch, so it seems a bit optimistic to assume the price of the two commodities will necessarily converge. It may actually be different this time.
As always, happy for you to disabuse me of the errors in my analysis!
Interesting to note the strong performance of the merchant power companies relative to ICLN and IXE.
Back in September 2023 (Ding DONG: New Energy Growing Pains Rewards Transition Patience), you made it clear that you thought that traditional energy companies expanding into power generation was a fool's errand. I disagree with this view... Gas and LNG are and always have been primarily power generation fuels, not transportation fuels. It is not a coincidence that Dutch TTF pricing is calculated by reference to MWh. For players like TotalEnergies, it seems entirely rational to me for them to vertically integrate by expanding their LNG and gas businesses downstream into power trading, storage, generation and supply to capture more of the value chain. Furthermore, while the trend may be slower than expected a few years ago, the growth of EVs means that service stations will need to sell electrons along side their hydrocarbons to hold market share.
Given the fabulous market performance of merchant power companies, do you still believe that it is misguided for traditional energy companies to try to play in this space? I note that in the 6 months to June, TotalEnergies achieved ROACE of 10.8% in its integrated power segment, compared to 14% in integrated LNG and 16.6% in E&P. While I do not expect it, if brent falls back to $50/bbl, I would not be surprised to see integrated power outperform E&P on ROCE. Furthermore, given the fact that the market clearly values merchant power earnings at a massive premium to oil and gas earnings, seems to me that TotalEnergies strategy makes sense on several levels. So do you still believe their strategy is flawed? Quite interested to understand what I am missing here.
I realize that you do not like to comment on specific companies, so maybe you could just give me a general answer?
Nat, Yes, over past several months (i'll have to dig up when I first mentioned it), I have become more open minded about traditioanl energy evaluating power...though it is still a high hurdle.
Oh, one other point...
In your comparison of the share price performance of ICLN and IXE, it would have been instructive to add an arguably better comparison to IXE; COPX, the largest copper miner ETF. As your old colleague Jeff Currie has pointed out until he is blue in the face, copper is the new oil in that it is the commodity most fundamental to the energy transition and electrification trend.
Will oil close the gap with copper by following the price up? Or is this time something different going on? I would argue that from a long term perspective, copper has better long term demand drivers based on the energy transition and the electrification push AND a much more constrained supply outlook... Maybe at some point something analogous to the shale revolution will happen in the copper market (like the new leaching technologies being rolled out by Freeport McMoran and others) , but for the time being, there looks like a pretty insurmountable supply shortfall in the very near future.
Furthermore, copper demand is actually displacing oil and gas demand, as EVs claw market share away from ICE vehicles and solar and wind power generation claws market share away from coal and gas. According to the EIA in August, 80% of all new electricity capacity added in the the US in first half of 2024 was solar and battery storage. At this point, copper is basically eating oil and gas's lunch, so it seems a bit optimistic to assume the price of the two commodities will necessarily converge. It may actually be different this time.
As always, happy for you to disabuse me of the errors in my analysis!
I need to do more work on copper. I am familar with your points, but haven't analyzed myself.
Great webcast, as usual.
Interesting to note the strong performance of the merchant power companies relative to ICLN and IXE.
Back in September 2023 (Ding DONG: New Energy Growing Pains Rewards Transition Patience), you made it clear that you thought that traditional energy companies expanding into power generation was a fool's errand. I disagree with this view... Gas and LNG are and always have been primarily power generation fuels, not transportation fuels. It is not a coincidence that Dutch TTF pricing is calculated by reference to MWh. For players like TotalEnergies, it seems entirely rational to me for them to vertically integrate by expanding their LNG and gas businesses downstream into power trading, storage, generation and supply to capture more of the value chain. Furthermore, while the trend may be slower than expected a few years ago, the growth of EVs means that service stations will need to sell electrons along side their hydrocarbons to hold market share.
Given the fabulous market performance of merchant power companies, do you still believe that it is misguided for traditional energy companies to try to play in this space? I note that in the 6 months to June, TotalEnergies achieved ROACE of 10.8% in its integrated power segment, compared to 14% in integrated LNG and 16.6% in E&P. While I do not expect it, if brent falls back to $50/bbl, I would not be surprised to see integrated power outperform E&P on ROCE. Furthermore, given the fact that the market clearly values merchant power earnings at a massive premium to oil and gas earnings, seems to me that TotalEnergies strategy makes sense on several levels. So do you still believe their strategy is flawed? Quite interested to understand what I am missing here.
I realize that you do not like to comment on specific companies, so maybe you could just give me a general answer?
Thanks! Nat
Nat, Yes, over past several months (i'll have to dig up when I first mentioned it), I have become more open minded about traditioanl energy evaluating power...though it is still a high hurdle.
AS climate change takes hold of the planet Man struggles
with the right direction and plan , This is only one
part of the scenario , A possible direction for man kind
to defeat climate change , A fleet of nuclear climate fighting
battleships designed to last sixty years to bring us from 420
PPM too 280 PPM CO2e in the atmosphere our pre
industrial levels witch will offer safe and stable
climate
The exact frequencies and wave lengths and transmitting
devices are yet to be determined on some of the project
, it requires a war like budget for research and
development and implementation ,I would suggest a budget
of 100 billion dollars per year,thats 1/1000 the of the
global yearly GDP that's a pittance to ensure the survival
of the human race that's 6 trillion over 60 years and
that is the time frame it will take rectify the climate
For only if we consider this a war shall we be
triumphant, The planet mobilized thousands of war ships
in 5 years of the second world war. why cant we do the
same , 1000 vessels constructed over 15 years as well as
1200 land based transmission sites and 1000 tuned
resonance climate monitoring and or transmission sats
after all this is a global climate defence ,SRM , Global
weather control system , That could be replicated and
updated in 60 years , I say 60 years because that is the
lifetime expectancy of the nuclear climate battle ships
and the land based transmission sites
boats/ Vessels to fight climate change via ocean iron
fertilisation and atmospheric electrochemical reactions
200 mt long 60 mtr wide super liner s 1000 of them the
battleship s of the war against climate change nuclear
powered 500 MW each of mobile tuned resonance frequency
modulation , The variation and combinations are endless
Oceans
Starting with large sets anodes and cathodes mounted to
the bottom of the boats generating iron sulphate via
electrochemical RF reaction ,stimulating and generating
the phytoplankton to feed on co2 Sequestering up to 10
GT per year co2e planet wide on the ocean , we will not
have to worry about the London protocol because were not
dumping anything rather were manufacturing right out of
thin air and all on site
Electrochemical ocean iron fertilization and alkalinity
enhancement approach toward CO2 sequestration - npj
Ocean Sustainability
nature.com https://www.nature.com/articles/s44183-024-00064-8
Ocean electrochemical iron fertilisation pdf
Biosphere
Next on our tool list is ship deck mounted Ionic cloud
generators , That generate negatively charged ion Via
scalar wave generators low level biosphere/Troposphere
clouds for SRM , Charging the dimethyl sulphates and
cloud nuclei from the ocean to form clouds
Stratosphere
Next on our tool list is project Lucy , ship mounted
microwave transmitter to target methane adaptation by
targeting the covalent bond and un couple the c H bonds
and converting the methane to co2 and diamonds , The
demands also generate a SRM deflection type reaction in
the stratosphere
https://www.scribd.com/document/136405901/Project-Lucy-
Extended-Version-4
This takes care of the biosphere and the
stratosphere now for the ionosphere
Ionosphere
Ship deck mounted Haap type radio transmitters 160
aerials to target the ionosphere for artificial plasma
cloud generation to deflect in coming solar radiation
we would also use the RF and plasma generation to
convert the covalent bond of co2 and break into c witch
falls to the earth and feed s the soil and 02 witch
rises from the to form ozone,, While also stimulating
phytoplankton in the ocean generating more oxygen that
will eventually converted to 03 ozone to plug the gaps in
the ozone layer , This could rectorate /adptate up 40 GT
of co2 per year , this would be a real game changer with
such a scenario allowing us to return to pre in industrial
co2 levels of 280 PPM and a safe and stable climate
WE could also use the haap array to charge existing
particles in the atmosphere to vibrate and deflect solar
radiation , No need to add any more forego particulate
we already have put enough up there , I would suggest we
target the methane and co2 molecules to begin with
WE could also turn the system up and down almost
instantly to accommodate the solar flare scenario or polar
flip , during these time the magnetosphere is extremely
depleted
The combination of these four RF/ plasma generation
technologies could also be used for the weather
generation and control network, I would suggest a global
weather control network , Utilising the 1000 boats and
1200 land based transmitters , ,5 scalar wave ion
transmitters per country 200 countries to generate low level
cloud SRM and generate the transpiration hydrological
process water movement in the atmospheric rivers can be
easily directed to places of most needs . drought /forest
fires deserts , dry third world countries/food production
areas , as well as each country having 5 scalor emitters
they would also have a haap transmitter each
forget about charging syress clouds were going to
redesign aircraft fuel so we don't have the sulphur the
soot and the pollutants being emitted , this will save
lives , a bio fuel would have to be developed and
manufactured to clean up the air ways , we could also
take this opportunity to redesign the vapour trails to
better serve the control network and the planets bio
system
A satellite monitoring and atmospheric adaptation scenario
with 1000 ft x ft cube type sats or even up to 1 x 1 mtr
cube sats emitting tuned resonance frequencies that can
be tuned and programmed from afar as well reporting
voluble atmospheric data/ atmospheric manipulation
all controlled by quantum AI computing developed by
NASA NOAH TELSTRA and the European space agency the north
/ south / east /and / west of it
That's 3200 pieces of equipment and installations to be
constructed /built in the next 15 years target
operational by 2040 , The land sites to be powered by
solar wind and battery with gem set back up on 2 x 2 KM
sites
the haaps to be at least the equivalent to Burbank's
Alaska site
while the boats will be nuclear or oxygen powered
generating 500 MW of tuned resonance frequency
transmission capability
This is the way of the future especially if we can
conj our oxygen power generation
The planet will be around for billion of future years
but the atmosphere wont be , so we generate artificial
atmosphere now
NO refuelling of vessels with dirty bunker fuels
[nuclear]no emissions no mining or manufacturing of iron
sulphate s for ocean iron fertilisation and no mining or
manufacturing of iron chloride for enhanced methane
oxidisation ,No dumping of lime stone for enhance ocean
alkalinity , no spraying of sea water for marine cloud
bighting and no spraying of particle into the atmosphere
to be charged vis RF / micro eave /next rad , All can be
achieved today via electro chemical reactions aboard
our climate battle ships with all but no carbon
emissions ,and no dumping of substances into the
ocean with the associated mining/transportation and
distribution costs , and no breaking of the London
protocol on dumping substances at sea ,
These boats and land based installation will be at the
wars front door fighting climate change on the front
line , This is only one in many tools that will be
required to defeat climate change
This scenario can reduce the global average temperature by
up to 5 DG , by simply turning it up or down , like a
thermostat , able to react instantly to space weather
events and volcanoe eruptions and events, Storms cyclone s all being
driven and controlled by our climate weather control system
Research and development into
climate changing greenhouse gas s
Mitigation
Adaptation
Restoration
T J Harvey
www.theglobalgorilla.com
Strategic planning in climate engineering for
sustainable infrastructure development worldwide
https://docs.google.com/document/d/1Yly53ZRikqrwvDNzu9KNelbNeNQW7sKB/edit?usp=sharing&ouid=103881424746433165106&rtpof=true&sd=true
Ummm, okkkk!
Who else hits 'like' before you even watch it, because you already know you will? 😆
there is a small, but dedicated contingent!!! Always appreciated.