Rambling Thoughts On Oil From Someone With A Rolling 30-Year Investment Horizon -- June 19, 2023

Locator: 44981INV.  

There is nothing new in this blog. I've been saying this for the past few weeks. 

I've been blogging since 2007, though the "Bakken" blog has at its first post, dated sometime in 2009. From day one, one theme was an eventual shortage of crude oil. I don't know "who" started that meme (there were probably several) and thus I have no idea what the "hidden agenda" was -- by those who started the meme.

Certainly, Big Oil and Saudi Arabia benefited from that meme.

It took awhile, but it's now clear to me that there will never, ever be a shortage of accessible, affordable crude oil. At best, the meme has changed to this: there will continue to be an increase in crude oil demand, albeit not much, through 2050, with some suggesting that from 2027, crude oil demand will start to decline.

In other words, for the investor with a rolling 30-year horizon, "oil" is not a growth sector. It may be a lot of things for investors and others, but for investors, it won't be a growth sector. Someone much smarter than I opined that Big Oil would now "go the way of the cigarette companies, but not, perhaps the way of the dinosaurs.”

For humankind it matters not whether we run out of crude oil for transportation. We will never run out of energy for transportation: wind and solar will last forever; uranium / nuclear energy will last just as long for all practical purposes; coal will easily last several centuries; natural gas will last long enough, and then it's electrolysis of ocean water (inexhaustible and renewable) to make hydrogen for as far out as we can see.

I'm gradually re-balancing my portfolio.

Warren Buffett: know what you have in your portfolio and know why you own it.

I have "too many" companies in my portfolio; I know why I bought them originally, but it now becomes more difficult to keep up with everything.

I'm looking forward to a busy, busy week.

Enbridge Ordered To Close Part Of Its Wisconsin Pipeline Within Three Years -- June 19, 2023

Locator: 44980ENB.
Locator: 44980COAL.

What's the difference between cyber ransom and pipeline ransom? I honestly see no difference from a "dollar" and/or business point of view. 

Link here. 

Native Americans are exacting ransom from Enbridge. Court agrees. 

********************
From Bloomberg Today

Link here.

Big Oil: pivots. Last hold-out -- Shell -- seals the deal.

Buffett: pivots. Sells US banks; buys Japanese "trading houses."

Biochar: ? As long as it's not called "coal" or "lignite," environmentalists and "greenies" will support coal. One even self-identifies as green man char. 

Biochar:

• just like coal, except coal burns hot and produces less smoke:

• and look at this -- biochar has more carbon content than lump coal:

• biochar being made -- clean, smoke-free, scalable, great for the Amazon River drainage system -- oh, then this popped up -- from The US Biochar Initiative:
  

For The Archives -- Nothing About The Bakken, Nothing About Energy -- June 19, 2023

Locator: 44979ARCH.  

Exactly fifty-six years ago, my parents and I drove from Williston, ND, to Northfield, MN. I was enrolled in a "literature / arts studies" summer course at St Olaf College, a six-week program, I believe. It was between my junior year and senior year of high school. A LAE for me.

Today, fifty-six years later, our middle granddaughter is flying out to California, to participate in a three-week flight course with the United States Air Force. This is also the summer between her junior year and senior year in high school. [We just received text message: she's in-flight having just departed DFW.]

Back in the 1800s, 1900s, and perhaps the early 2000s, the upper class Brits -- particularly the English -- had a long-standing "custom" of sending their first-born sons on a "grand tour" to study the classics in Europe: first to Paris, then Italy, then Greece. If the Brits mentioned "the grand tour," it was understood what they meant.

One wishes that the Americans had a similar custom. We probably do, but we need a catchy phrase by which to call it. 

For American high school / college-bound students. the three most important summers in their lives (up to that point):

• the summer before kindergarten -- the prologue;
• the summer between junior / senior year in high school -- the penultimate tour;
• the summer after graduation from high school -- the anticipatory grand tour -- Europe with a guide.

For college students, four summers:

• first summer: close to home (?)
  
• second summer: overseas research program with professor
• third summer: internship in major city at least 1,000 miles from home
• fourth summer: the second last grand tour -- Europe on one's own -- hook up with friends, once overseas.

A couple of years ago, our two older granddaughters signed on as the only two members of a sailing crew, sailing the Greek islands with their dad on a 36- to 38-foot sailboat. Their dad was the skipper and they, his crew. They had all had sailing experience at some level. Their dad had served fifteen years in the US Navy as a submariner, culminating at the XO on the USS Salt Lake City. 

From wiki, the highlight(s) of him on that submarine:

On 22 October 2004, Salt Lake City returned from a deployment with the USS John C. Stennis carrier strike group in the western Pacific Ocean, after surging, over a month ahead of schedule, in support of Summer Pulse '04.

Port calls during the deployment included Guam, Sasebo, Yokosuka, Singapore, and Oahu, Hawaii. [His wife, our daughter, flew to Singapore, with their six-month old daughter to join him for two weeks of shore leave.]

Salt Lake City conducted an inactivation ceremony in San Diego on 26 October 2005, then departed for a transit under the polar ice. [This was a "biggie."]

On 15 January 2006 she was decommissioned at the Portsmouth Naval Shipyard. Over a year later, the hulk was taken under tow, arriving on 8 May 2007 at Puget Sound Naval Shipyard, where she will be recycled and scrapped. 

Our son-in-law re-entered the civilian world after "his" submarine was decommissioned. 

Beer -- June 19, 2023

Locator: 44978BEER.  

From July 21, 2015, wow. Eight years ago.

I posted the earlir note (below the fold below) in 2015, long before Modelo Especial became the second best-selling brand of beer in the US. Outside of the US, BUD owns Modelo -- which few of us probably knew until now. 

Many, many, many story lines.

From The WSJ over the weekend:

 

 

See first comment: added --

********************************
July 21, 2015

Absolutely Nothing About Anything

This is kind of cool. Don sent me a link to today's post by Mark Perry (Carpe Diem) which has an interesting graph of the Bakken.  That alone is worth the visit, but even more interesting is the note about Pabst Blue Ribbon.

It's hard to find inexpensive beer in a can for beer can chicken. PBR is the answer, although I sometimes have trouble finding it. As a substitute, Modelo from Mexico.

And speaking of "hip" PBR. Perhaps the most hip singer in the past few years, Lana Del Rey, mentions PBR in This Is What Makes Us Girls.

By the way, speaking of current culture, I finally connected the last dot with regard to David Lynch's Mulholland Drive. I can now die happy.

I've also finally beginning to understand the progression of dinosaurs to birds and mammal-like reptiles to mammals after reading Richard Dawkins' The Ancestor's Tale for the third time. I don't always "get" something the first time around. 

**************************
A Musical Interlude

Link here.

The Renewable Energy Scam -- June 19, 2023

Locator: 44977SCAM.  

Profile: EIA energy by state, North Dakota, link here.

*************************
101 Days Of Summer -- Day 23

ERCOT: it's gonna be close. Not enough wind / sun late this afternoon. Link here.

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

As long as solar and wind developers show Texas politicos that capacity exceeds demand, developers will be able to keep adding more solar / wind, and closing conventional (fossil fuel) sources.

In the graph above, the folks investing in renewable energy want the 1300 - 1900 energy price spike to incrementally expand to the left and to the right.

It's all about two things:

• fund all infrastructure on back of conventional/historical pricing models;
• "area under the curve"

We talked about this on the blog years ago. I first noted it while sitting in on a Harvard Business School talk on renewable energy -- about ten years ago. The scam was obvious then for those who understood graphs. LOL.

At the time, I questioned whether we would see publicly-provided graphics to demonstrate the scam.