Best of the Week
Most Popular
1.London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - Nadeem_Walayat
2. Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - Michael_Noonan
3.Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - Nadeem_Walayat
4.Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - Jim_Willie_CB
5.Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - Keith Markey
6.Gold Prices 2014: Do What Goldman Does, Not What It Says - David Zeiler
7.Bitcoin Price Strong Appreciation to Be Followed by Declines? - Mike_McAra
8.Gold Preparing to Launch as U.S. Dollar Drops to Key Support - Jason_Hamlin
9.Doctor Doom on the Fiat Money Empire Coming Financial Crisis - Andrew_McKillop
10.The Real Purpose Of QE - It’s Not Employment - Darryl_R_Schoon
Last 72 Hrs
The Big, Bad Market: A French Psychosis? - 25th Apr 14
The Great American Giveaway - 25th Apr 14
Has the Stock Market S&P Topped At Exactly The Same Price As Gold? - 25th Apr 14
Bond Market Investing - Not All Debt Is Created Equal - 25th Apr 14
This is the Next “Big Thing” in Energy - 24th Apr 14
Rome Wasn't Burnt In A Day - 24th Apr 14
When Does Government Policy Become Criminal Behavior? - 24th Apr 14
The Great Recession Grinds On - Measuring Misery around the World - 24th Apr 14
Apple, Facebook Beat Expectations - Stock Markets Long-term Recap - 24th Apr 14
Broad Stock Market Situation on the Remains Tense as Companies Release Quarterly Earnings - 24th Apr 14
How High-Frequency Traders Use Dark Pools to Cheat Investors - 24th Apr 14
Stock Market Bears Wrong Again, Apple to Push Dow to New All time High - 24th Apr 14
Gold Prepared for the Attack of the Short Sellers - 24th Apr 14
Weak U.S. Housing Data Supports Euro - 24th Apr 14
Killing the Maximum-Wage Myth - 23rd Apr 14
U.S. Quarterly Economic Review - Optimism at the Fed - 23rd Apr 14
Why Mohamed El-Erian Left Pimco - Video - 23rd Apr 14
QE Is A Fraud Perpetrated By Made Men - 23rd Apr 14
Gold and Miners Outperform Once Again - 23rd Apr 14
G-20 and the US Tell the Bank of Japan to End Quantitative Easing - 23rd Apr 14
How to Get in the Trading Game and Profit - 23rd Apr 14
Fed Follies, U.S. Housing Market Fiasco - 23rd Apr 14
What Will December 31, 2014 Financial Headlines Look Like? - 23rd Apr 14
Why Gasoline Prices are Surging Again - 22nd Apr 14
Cold War 2.0 - 22nd Apr 14
The JIS – Junk Ideology Syndrome - 22nd Apr 14
How to Avoid Losing All Your Money - 22nd Apr 14
Silver Up, Stocks S&P Down - 22nd Apr 14
U.S. Mainstream Media Propaganda Setting the Stage for War With Pakistan - 22nd Apr 14
U.S. Interest Rates are NOT Rising! - 22nd Apr 14
A Crisis vs. the REAL Crisis: Keep Your Eye on the Debt Ball - 22nd Apr 14
Bitcoin Implications of Lack of Price Action - 22nd Apr 14
Japan - The Twilight Of The Rising Sun - 22nd Apr 14
Is This What a Credit Bubble Looks Like? - 22nd Apr 14
The Dark Side Of The Silver Mining Industry - 21st Apr 14
Strong U.S. Dollar Rally Could Pull Rug From Under Gold and Silver - 21st Apr 14
Silver Feeble Rally Fails to Hold Breakout, Falling Back Towards Support - 21st Apr 14
Stock Market Smart Money – All Out or More to Go? - 21st Apr 14
Fast Rising Pump Prices Counterattack - 21st Apr 14
Extreme Climate Change And Life On This Planet - 21st Apr 14
Gold and Silver Stocks Sitting Tight - 21st Apr 14
Stock Market Minor Correction Imminent - 21st Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Next Big Boom in Energy Isn't What You Think

Commodities / Energy Resources Dec 19, 2012 - 11:26 AM GMT

By: Money_Morning

Commodities

Dr. Kent Moors writes: As the ongoing debate between renewables and fossil fuels continues, there is a wrong-headed presumption that there will only be one clear victor.

But recent trends in the wind and solar age tell us that this conclusion just isn't so.

The truth is both types of energy will be required to work in tandem in order to achieve our energy goals in the future.


And - as these developments accelerate - it is in this "new" energy balance that individual investors will find the next big boom.

These days, with oil-rich countries like Saudi Arabia and the United Arab Emirates unveiling huge renewable energy projects, even some analysts are drawing the wrong conclusions.

But I have to stress, renewable development is not a signal these countries are running out of crude oil anytime soon.

Quite the contrary, countries like Saudi Arabia realize that one side of this energy equation will require the help of the other.

The same holds true in North America, where the surplus of unconventional natural gas has led some to the erroneous conclusion that wind and solar - still requiring significant government subsidies - have been dealt a fatal blow.

Wrong again. This is not a winner-take-all battle. There will be no silver bullet that delivers the next "new age of energy"

Rather, it will be in the integration of all the available energy sources that will lead to the next big development. And that is going to require sourcing from genuinely distinct and dissimilar energy categories-including wind and solar.

In fact, three recent events provide clear indications that this "energy integration boom" is already well underway.

One of these was in the San Francisco area, where gas turbines were cranking out electricity at near capacity on one end of the bay, while a huge wind farm was almost dormant on the other due to a lack of wind.

A second occurred in Southeast Asia. There a new battery of photovoltaic cells offset a bottleneck in the delivery of coal and natural gas to power plants.

The third was the usage of wind power in the Baltic to offset an unexpected interruption in gas deliveries on a recently completed onshore distribution spur from the new Nord Stream gas line moving under the Baltic from Russia to Germany.

Now these were three completely different events, but they certainly do not reflect a sudden change in either global energy problems or planning. What each has proven is that new trends in energy grid optimization have been accelerating over the past decade.

And this continuing trend will be the main driver in how we power our lives moving forward.

The Impact of Renewables Remains Limited
Here is the argument in a nutshell.

So long as we remain dependent on single energy sources for needed sectors, alternative possibilities will have little impact except on the margins. That means we require distinctly different energies that are capable of being mutually exchangeable as required.

Even if solar, wind, and geothermal will someday comprise the primary sourcing of electricity in certain regions, fossil fuels will still be required as backup. Similarly, where oil, gas, and coal remain as the essential power sources, renewables will serve in a similar secondary role.

Here is what is going to happen when this balance takes place. For the first time, the complete spectrum of energy needs will be able to factor in availability, efficiency, production/generation cost, and end-user price whenever an energy selection is made.

Availability, efficiency, cost, and price are the essential ingredients in determining the real impact energy has on economic development (or recovery). The overall scheme of energy application still places primacy on preferred energies either by region or by use. Coal is still the source of choice in Appalachia and China; meanwhile, oil still runs our vehicles.

Therefore, having a number of sources is not enough. Integrating sources is only half of the problem. We need to be able to exchange them in market use. There, transportation is still the primary shortcoming.

Natural gas is making a move to reduce dependence on gasoline and diesel. The persistence of the electric car, the end use integration created by the hybrid, the rise of biofuels, and even gasification, are all movements afoot on the vehicle fuel side.

There is still much that needs to be done for the integration to work.

But it has started.

On the power generation side, however, the expected grid moving forward will continue significant revisions already underway. The network we obtain electricity from will undergo changes that are more dramatic over the next two decades than in the previous three or four generations.

Several of the major ingredients are already in operation. With nuclear, geothermal, and even weave power thrown in for good measure, the balance prospects are encouraging.

The key in all of this remains integrating sources in an ongoing energy balance - requiring a number of different sources, exchangeable as to use and selectable as to availability, efficiency, cost, and price.

Of course, it is not simply the identification and operationalizing of the sources. We also require a multifaceted infrastructure to produce, distribute, store, and transport. This is likely to be the most expensive component of the mix.

We are witnessing the rise of new "midstream" components in many energy sectors paralleling the advent of limited partnerships in gas and oil. Each new demand of this expanding and revising energy infrastructure will also create opportunities for companies to explore new niches in the production-to-use sequence - creating new profit centers for investors along with them.

The market needs to understand that the expansion of wind farms and photoelectric fields is not a sign that oil and gas are dead. Nor is a booming shale gas basin a reason to short solar stocks.

The coming integration will establish a new way we power our lives, but it is one on which there will be ample room for ources mutually to benefit.

Source :http://moneymorning.com/2012/12/19/the-next-big-boom-in-energy-isnt-what-you-think/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014