Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17
UK BrExit General Election 2017 - Will Opinion Pollsters Finally Get it Right? - 19th May 17
Gold Mining Junior Stocks GDXJ 2017 Fundamentals - 19th May 17
If China Can Fund Infrastructure With Its Own Credit, So Can We - 19th May 17
Evidence That Stocks are More Overvalued than Ever - 19th May 17
Obamacare May Become Zombiecare In 2018 - 19th May 17
The End of Reflation? Implications for Gold - 19th May 17
Gold and Silver Trading Alert: New Important Technical Development - 19th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

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

© 2005-2016 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

Catching a Falling Financial Knife