Renewable Reliability

It may be hard to believe, but solar and wind became cheaper than natural gas in many places at the end of last year according to the World Economic Forum. The LCOE, or levelized cost of electricity, for coal and natural gas runs at around $100 per megawatt hour. Ten years ago, solars levelized cost was at $600 for the same hour. However, further investment into innovative technology as well as growth in the renewable sector has created a levelized cost of $100 and less today for the renewable. Meanwhile, wind power has a levelized cost half that of traditional energy providers, sitting at 50$ per megawatt hour. The exponential rate at which these renewable sources have become cheaper from just a few years ago suggests even more room for growth into cheaper price ranges. The report also mentioned that government subsidies are not hedging an advantage for these alternative energies, finding from the International Energy Agency that in actuality fossil fuels received four times the amount of government funding in comparison to renewables.

More than 30 countries worldwide have already achieved grid parity, the point where alternative energy costs meet traditional energy costs, and without government subsidies as well.

Now that renewables have become a cheaper source of energy on the grid than natural gas and coal, many claim that a full switch to these alternative sources could threaten the reliability of electrical service in the United States. While there may be some truth to this argument, the evidence has been hard to find. The true problem with renewable currently isn’t one of reliability, but rather capacity. The U.S. energy grid was not originally built for storing energy from renewable sources, and as a result there is currently an oversupply of renewable energy from large producers like California and Texas. California has actually been forced to pay nearby states to take their oversupply of renewable energy in recent months due to an inability to store the surplus. They have paid nearby states to take a valuable commodity off of their hands simply because they have so much of it. That sounds like nothing other than a great opportunity. But despite this abundance of sometimes even negatively priced clean energy flooding the market, further renewable usage in the U.S. is being held back by worries of reliability.

In truth, the nation has not even given renewables an attempt to run much of the energy grid, making it impossible to know whether a threat to reliability is present. Maybe reliability could become an issue if we allow too much renewable energy generation on the grid, but we should wait for evidence of as much to surface. Claiming that reliability is a problem without proper data to support the claim only makes traditional energy suppliers look like they are trying to save their own skin.

Whether you’re an energy industry official or you could care less about the issue, renewable sources may provide cheaper alternatives to powering all our lives, as businesses and consumers. Renewables are no longer a matter of curbing global warming, they’re just a good investment. When the option to make life cheaper across the board exists, we might as well give it a fair shot.

Written by: Chris Stomberg

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Texas offers more than oil

No farther south than you can possibly go in the continental United States lies the great country, sorry, I mean state of Texas, widely known among our peers as a safe place for cowboys, conservatives, and the booming oil and gas industry. Believe it or not, many misconceptions about TX and Texans are held by the residents of our fellow states. Once while outside TX, I had the question seriously posed to me of whether I ride a horse to school. In actuality, we all know you need a car to get anywhere in this immense state, and even then you’re probably sitting in traffic. In hindsight, entertaining the idea of riding horses to school would have been a much better conversation than explaining the reality: hours of traffic to move across town.

TX is a big state full of just as large surprises, some of which it’s own residents may not be aware. One of these surprises I just discovered today was that the lone star state contributed the most total wind and solar electricity generation in 2016 according to the EIA (U.S. Energy Information Administration). Already recognized colloquially and abroad as “the capital of the sunbelt”, due to the large amount of employment opportunities in the petroleum industry, with this new development the state may even be able to call itself, one day very soon, the energy capital of the U.S.

Written by: Chris Stomberg

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The rise and rise of Tesla

Just a couple of months ago, Tesla surpassed General Motor’s market value of fifty billion, cementing itself as the most valuable American car maker. Despite this reality, I still presently do not know anyone who drives a Tesla: but these numbers prove they are out there in force. I remember just five years ago when Tesla first started gaining notoriety. Lots of people were excited to hear of an electric car brand, no matter the exorbitant price line, due to growing concerns of global warming coupled with the appeal of an option never offered before. However, I remember just as well as many pessimists claiming that an energy fueled car company is something that could never work in the oil capital that is America.

Today, one can find as reputable a name as Morgan Stanley predicting that electric car sales could make up as much as forty, fifty, or even sixty percent of global light vehicle purchases by 2040. Of course, long term predictions are nearly impossible to make, just think no one even knew of Tesla a decade ago, and this reality is made apparent when comparing Morgan Stanley’s prediction with Exxon’s that energy vehicles will only make up ten percent of new car sales by 2040. Regardless of what the future holds, one thing that’s certain is energy vehicles are here to stay. And in no small part thanks to Tesla.

All this considered, Elon Musk’s, founder and owner of Tesla, decision to abandon two of Trump’s business advisory councils in lieu of Trump’s secession from the Paris climate agreement is an interesting development. Cooperation between oil and gas as well as electric energy interests I believe will yield the most productive outcome for everyone, but after Musk’s immediate departure from Trump’s councils I fear cooperation may be the last things these specific parties have in mind. But what do you think? Is Tesla facing a bright new future or more troubling roads ahead? Maybe cooperation between these interests is not necessary at all to provide the best outcome. Let your opinion be heard in the comments below.

Written by: Chris Stomberg

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Trump makes good on promise

In a show of integrity, last month Trump made good on his campaign promise to withdraw from the Paris climate agreement, much to the dismay of many renowned figures and countries across the world. Notably Trump mentioned he would like to enter into a deal with Paris that is more “fair” for the United States, however, the governments of Germany, Italy, and France immediately rebuked his proposal, suggesting the Paris climate agreement is non-negotiable.

As to date just about every single country on the face of the planet is a signatory to the deal, Trump’s proclamation does seem a bit ambitious. Furthermore, Trump’s hands are technically tied on pulling out of the agreement until 2019, on top of the fact a year’s notice in advance of one’s withdrawal is mandatory.

All things considered, if there is one man crazy enough to somehow make this withdrawal happen it is none other than Donald Trump. It’s important to take into account, regardless of whether you support or oppose Trump’s decision, that among those advocating for the Paris climate agreement are oil giants ExxonMobil and Chevron, as well as their european counterparts Royal Dutch Shell and BP. They claim that the climate agreement provides the U.S an excellent opportunity to take a leading role in positioning the global response to climate change. CEOs of tech companies Microsoft and Apple also believe Trump should stay true to the original agreement.

But enough of what everyone else thinks, how about you? Do you believe Trump can successfully pull out of the Paris climate agreement? Do you think the U.S. should? Why or why not? Let us know in the comments below. Have a good one!

Written by: Chris Stomberg

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Many energy enthusiasts may ask the question, what does it mean to support the continued production and use of oil and natural gas products in light of greener energy solutions? With the advent of what is colloquially referred to as “greener” energy and the resulting debate that centers around either green energy or oil and gas, supporting the business of oil and natural gas is more socially dangerous than ever. No where is this more evident than a college campus, of which I have had the glorious pleasure of being on for the past four years.

While in years prior one’s knowledge on the efficiency of oil and natural gas products gave merit to their belief that oil products are the most effective energy source, today such knowledge is swept under the rug as irrelevant in favor of opinions terrified by the prospect of global warming. In the modern era, a conversation about energy use and production goes hand in hand with debates about global warming and its costs, however, this does not change the facts of the situation. Seven billion and growing people on this planet require the use of energy everyday, and oil and gas is the only energy source efficient enough to meet all seven billion of our needs to date.

Although it is unfortunate, “greener” energy solutions have yet to offer an option anywhere near as effective as oil and natural gas products are capable. The moment this is no longer the case is the time to consider the benefits and deficits of revamping an entire planet’s energy ecosystem, but until then, more environmentally friendly options which are less capable of producing energy as efficiently as oil and gas should not be considered as a replacement.

Whether oil and gas ever really could be replaced is a different question. Let me know what you think by leaving a comment below!

Written by: Chris Stomberg

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Oil Abroad

While here at home in the United States we can rely on oil giants like Exxonmobil to continue to produce oil and gas products, you may be surprised to find out that this is not the case around the rest of the world. Just earlier this week, a state-owned oil and gas company named Dong, an acronym for Danish Oil and Natural Gas, sold the entirety of their oil and gas business sector to Ineos for one billion pounds. In addition to wrapping your head around the sheer enormity of this deal, let’s take a moment to consider that Dong is the largest energy company in Denmark.

For me personally, the largest energy company in the Kingdom of Denmark making a decision this drastic I feel could unintentionally result in energy complications for the citizens of Denmark in the future. Without getting into a debate about green energy or oil and gas, as if there can only be one, to completely deny the capabilities of the energy source that has been proven most efficient in the past century, oil and natural gas, seems a bit hasty. Although concern for the people of Denmark’s energy options may be on the rise, the good news is where there’s a seller you need a buyer.

Whether you have heard of Ineos making moves recently in the oil and gas business headlines or not, you certainly will sooner rather than later. For those out of the loop, Ineos is a privately owned multinational chemicals company stationed in the UK best known for producing and selling petroleum products. However, in recent months Ineos has made their plans to step into the oil and gas sector obvious over the course of a couple of business acquisitions. These include purchasing a two-hundred million dollar major pipeline from oil giant BP, the north sea pipeline, as well as the purchase of Dong’s oil and gas assets mentioned above.

One chapter in the textbooks of oil history’s annals closes, but at the same time another opens anew. And I, for one, am excited to see where this story is going.

Written by: Chris Stomberg

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