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Fear and Loathing in …. Everything?

Fear and Loathing in …. Everything?

By    |   Monday, 16 September 2019 12:14 PM

The political dialogue these days is a cacophony of screaming from opposing camps, reminiscent of trench warfare from back in the days when people believed that kind of combat could be effective

Dayton. El Paso. Midland-Odessa. The Russians are apparently working to reignite the nuclear arms race with ‘wonder weapons’ and their missile is so difficult to control that it is killing their own scientists. There is a massive divide in our country on how to deal with gun control and immigration. The bond yield curve got inverted, perhaps a harbinger of a recession. Of course, everyone is concerned about the environment. Despite the direct correlation of coal-fired electricity generation to climate change, a huge new coal mine in Australia has been approved to supply coal to power a plant in India that will sell electricity to Bangladesh.

As discussed in a previous Newsmax Finance post, natural gas can, and should, play a major role as a major driver for energy production in Asia and sub-Saharan Africa, two areas that are expected to experience the most economic and population growth in the coming decades.

Is there any encouraging news?

The short answer is ‘yes’. While I will not get into gun control, immigration, monetary policy, or a potential nuclear arms race, I do have some thoughts on energy policy.

Let’s start with encouraging news about wind energy development. In the United States, there is currently 24 gigawatts of wind capacity under construction. Assuming these projects are all competed, they would equate to a 16-fold increase in the amount of wind generation capacity in the U.S. Some of the power purchase agreements (PPAs) for new wind are priced at less than 2 cents per kilowatt hour. The average price of a kilowatt hour in the U.S. was 10 cents as of May 2019 per EIA.

Nuclear power is a baseload electricity source - meaning that it can be turned up and down like a light dimmer - that has helped the United States to avoid 16,331.27 metric tons of carbon dioxide emissions since 1995. And, despite a very solvable storage controversy and more than one town that would love to have the economic boost associated with safely storing the country’s spent nuclear fuel, the United States has the ability and expertise to generate nuclear power.

By the way, the current solution to storing nuclear waste? Store it on site until a more permanent process facility can be approved and implemented. This has been the case for a long time; Yucca Mountain was picked by Congress as permanent solution for nuclear disposal in back in 1987 and it’s still not in operation.

In the United States, carbon emissions have gone from 2.16 metric tons in 1995 to 1.93 metric tons in 2018. Note that emissions peaked at 2.54 metric tons in 2005 and started a downward trend around 2009, the same time the shale revolution took off in the United States.

Meanwhile in the oil patch, American shale producers are producing oil and gas at a predictable and prolific rate, allowing American consumers to barely feel a change in prices while Venezuela (and its ability to supply crude to the world) is collapsing and Iran has been openly hijacking oil tankers.

If that’s not good news, I don’t know what is because it wasn’t that long ago when either country could raise the prices at our gas pumps. Not anymore.

Ryan Scott is Vice President at HBW Resources. He previously worked at Deloitte & Touche’s Strategy & Operations Consulting practice.

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The political dialogue these days is a cacophony of screaming from opposing camps, reminiscent of trench warfare from back in the days when people believed that kind of combat could be effective
fear, loathing, everything, investors
Monday, 16 September 2019 12:14 PM
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