A Three-Fer -- This Doesn't Happen Often -- August 14, 2016

A three-fer. This doesn't happen often:

• a story about the Bakken
• a photograph taken outside of Williston in The Washington Post 
• a story that supports the thesis that wind/solar will drive natural gas demand

First things first.

At the link, note the photograph. The story was published in The Washington Post. Apparently the only file photos of the Bakken that The Post has were taken in the winter. LOL.

But more importantly, I'm curious if any Williston reader can identify the general location where the photo was taken. There are buttes in the Williston area, and, if indeed this photograph was taken near Boomtown, USA, this appears southwest of Williston, on the way to Fairview. There is a CBR terminal out in that area.

But now, the real reason for posting this story -- sent to me by a reader, thank you very much.

This story is all about the need for dispatchable energy in light of government-mandated solar and wind energy.

We’re at a time of deeply ambitious plans for clean energy growth. Two of the U.S.’s largest states by population, California and New York, have both mandated that power companies get fully 50 percent of their electricity from renewable sources by the year 2030.

Only, there’s a problem: Because of the particular nature of clean energy sources like solar and wind, you can’t simply add them to the grid in large volumes and think that’s the end of the story. Rather, because these sources of electricity generation are “intermittent” — solar fluctuates with weather and the daily cycle, wind fluctuates with the wind — there has to be some means of continuing to provide electricity even when they go dark. And the more renewables you have, the bigger this problem can be.

"The particular nature of ..." LOL. Yes, the "particular nature of wind and solar" --- well, we will get to that in a moment. In fact, now.

Note: the mainstream media now refers to wind and solar energy as "intermittent" energy -- something we've been doing for quite some time.

Undependable would be another word for wind and solar energy. As well as expensive, unnecessary, fryers, slicers and dicers.

The writers consider all this "ironic":

Now, a new study suggests that at least so far, solving that problem has ironically involved more fossil fuels — and more particularly, installing a large number of fast-ramping natural gas plants, which can fill in quickly whenever renewable generation slips.

The writers also consider this "surprising":

In the study, the researchers took a broad look at the erection of wind, solar, and other renewable energy plants (not including large hydropower or biomass projects) across 26 countries that are members of an international council known as the Organisation for Economic Co-operation and Development over the period between the year 1990 and 2013. And they found a surprisingly tight relationship between renewables on the one hand, and gas on the other.

And as wind and solar increases, fossil fuel demand increases slightly faster (and remember, there was already a lot of fossil fuel in place; it was wind and solar that was "new"):

“All other things equal, a 1% percent increase in the share of fast reacting fossil technologies is associated with a 0.88% percent increase in renewable generation capacity in the long term,” the study reports. Again, this is over 26 separate countries, and more than two decades.

So, if wind and solar increase by less than 1%, the fossil fuel required to back it up appears to increase by 1%.

And for investors, it's an open book test:

The type of “fast-reacting fossil technologies” being referred to here is natural gas plants that fire up quickly. For example, General Electric and EDF Energy currently feature a natural gas plant in France that “is capable of reaching full power in less than 30 minutes.” Full power, in this case, means rapidly adding over 600 megawatts, or million watts, of electricity to the grid.

I guess it's a two-fer for General Electric: building wind farms and natural gas plants to back them up.  An open-book test for investors.

I know it doesn't work quite this way, but the "low-information crowd" won't catch on for awhile, but the "rule of thumb": when I see another 500-megawatt wind farm going up somewhere, I know that another 568-megawattt natural gas plant is going up somewhere. 

Note: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here. For the record, some time in the last six months I started buying shares in GE and will accumulate shares in GE on a regular basis, and will leave those shares to our two daughters and their children. 

*************************

And, For The Record ... Bernie Sanders Buys His Third Home

A "Modest" Lakefront Summer Home

Even Vanity Fair saw the hypocrisy in this story.

Bernie Sanders now has one thing in common with the millionaires and billionaires and other 1 percenters he so frequently attacked on the campaign trail: he now owns his very own summer home. Vermont magazine Seven Days reported Tuesday that the 74-year-old senator and his wife, Jane Sanders, have purchased a four-bedroom house on the shore of Lake Champlain for roughly $600,000. Jane told Seven Days that they had recently sold a house in Maine that had belonged to her family since the 1900s, and used the proceeds to purchase the new property, which is located in North Hero (population 803, as of the 2010 census). With this purchase, Sanders now owns at least three houses, the others being in Burlington, VT, and Capitol Hill in D.C. Sanders, an outspoken advocate for the working class who spent his 2016 presidential primary campaign railing against income inequality, remains one of the poorer members of Congress, and his net worth is among the lowest in the Senate.

The writer of the article appears to be a lowly-paid journalist who voted for Bernie and now feels duped.

So many story lines:

• modest...lakefront ---- my wife, a Hillary supporter -- says there is no such thing as a "modest lakefront summer home"
• "at least three homes" -- because the young journalist didn't want to do all the work it might have taken -- if it was even possible -- to determine how many houses Dick Bernie and Jane own
• Bernie's net worth among the lowest in the Senate; imagine how the other senators are doing
• Jane says she sold a house that had been in the family since the 1900s -- oh, give me a break -- in the 1900s, up in Vermont? It was a lean-to...
• carbon footprint -- just getting there in the SUV every weekend; and then the utilities....
• you can go to Zillow and see that most houses in the area are between $195K and $520K (making the $600K "modest" lakefront home somewhat pricier than the average); although there are homes from $1.5 million to $3.0 million on some lake front areas
• among the one-percenters; laughing all the way to the bank 
• Vanity Fair: famous for its photo-journalism was unable to obtain a photograph of this "modest" lakefront summer home
• no doubt, there is a wall around this home, also

Dispatachable Energy -- The Demand Is Growing -- August 9, 2016

This is incredibly cool. For years I was talking about the downside of wind and solar energy. I kept missing one big story line and a reader kept hitting me over the head -- reminding me of the story line. I finally got the "clue bug" some months ago.

The story line: dispatchable. That "word" is seldom (never?) used by wind and solar advocates; and, I doubt most Americans even understand the concept. I understand it but missed the importance of the issue until recently.

It appears that the authors of the article at Rigzone realized that, also. Look at that article. Except for the opening line, there is only one word put in bold.

Dispatchable.

And then get this. Just as the central planners at federal governments around the world are mandating increased wind and solar energy, "demand for dispatchable electricity generation is growing."

In an environment where demand for dispatchable electricity generation is growing, the last thing one wants is more solar and wind energy, neither of which solve the problem. Ironically, investors in natural gas should embrace this new-found interest in wind and energy.

Every time another wind or solar energy project comes on line, another natural gas back-up plant needs to be in place to back up the non-dispatchable energy project.

I've long given up on voicing irritation with wind and solar -- I'm preaching to the choir, and I can't do anything about it anyway. The public has spoken: they want more wind and solar -- or at least their elected representatives do.

But, for investors, a win-win on so many levels.

From the linked article:

Thanks to shifting demand patterns, suppliers of liquefied natural gas (LNG) from producing countries such as the U.S. and Australia increasingly will need to look for new homes for LNG beyond traditional major destinations such as Japan and South Korea.

The expansion of the global LNG trade, coupled with growing demand for dispatchable electricity generation, translates into increased opportunities for natural gas storage operators. Gas storage players will need to develop an increasingly customized slate of products and services for existing and future customers, who are demanding more flexibility and becoming more cost-sensitive.

The [natural gas storage] sector was built over decades to serve a very predictable and entrenched market condition: moving gas from North American production zones (south and west) to consuming areas in the eastern markets that generally have strong winter peak demand.

The nature of the new production [in the northeast US] is high initial deliverability with long, flat production.

The new production profile facilitates "an almost instantaneous deliverability. Consequently, it helps offset and reduces seasonal supply variations from production, making the market slightly less volatile to supply shortfalls.

The near-instantaneous deliverability of natural gas upsets the decades-old structure of the storage market and makes some assets more valuable than others.