Interesting Moves by Big Oil

[BarryBobPosthole]

These guys don’t play. And while their initial investment is small to begin with (compared to whats being invested in low carbon stuff) it ain’t peanuts.

I run hot and cold on whether I like Axios news. But its safe, and generally pretty reliable, as media goes that is.

BKB

https://www.axios.com/2021/05/09/shell-ceo-climate-change-axios-hbo

[Thumper]

Makes sense to me. It reminds me of my grandfather’s business. (Where he worked) It was the biggest office supply business in Orlando and had been around since the dark ages. Their biggest part of the business was typewriters. When electric typewriters came out, they adjusted to the market.

But, the ownership was aging and when word processors came out, they dragged their feet adapting to the new business. Once P/C’s came out, they were blind to the handwriting on the wall and eventually had to close the doors. I commend Shell for their foresight. It’s a matter of survival. As for the office supply business, luckily, my grandfather was at retirement age and didn’t have to go job hunting after like 35 years of working there.

As for this green movement, everyone is looking toward batteries. Toyota has the tremendously popular and successful Prius, but they’re not really throwing their assets into that avenue of development. Lynn’s brother was an Engineer with Toyota his whole adult life and drove a hydrogen car. I rode with him quite often and it was pretty cool. The only thing that came out of the exhaust was a few occasional drops of water.

According to him, Toyota is putting most of their eggs in the hydrogen car development, while the rest of the market is going electric. Toyota didn’t get where it is today by making major mistakes, so it’ll be interesting to see how the market will develop in the future.

[BarryBobPosthole]

Hydrogen makes perfect sense because 90% of the changes to make it work are in the gas tank. That's always been the problem with CNG and Hydrogen, how to compress the gas enough to carry the volume needed for a decent range. And the oil guys are right: they have the world distribution systems already in place They know how to transport stuff, they know how to wholesale it and retail it. And for a big part of the world, electric vehicles are just a bridge too far, from a marketing standpoint too, not even counting the carbon footprint/pollution issues that EVs tote along as well.

But regardless what happens, what this fellow is actually saying is "We want a strategy that will keep you as firmly attached to our milky white titties as you are now"

Don't fool yourself thinking anything else.

BKB

[Thumper]

Oh, definitely. They’re too big an industry to go my grandfather’s office supply store route. Way too big to fold simply due to a change in technology.

Personally, I have no idea where this is all headed. I just know I don’t want to be a Guinea pig for testing new technology. I’ll stick with the dinosaur juice to the bitter end.

[Penguin]

You should take a gander at my linkedin feed. These types of discussions ~cough~ arguments are a daily thing.

I wish I could be more positive in my assessment, but I can't. The UK and Germany are showing the way forward and it ain't pretty. I think watching those two bastions of green energy flounder and break themselves on the rocks of reality have solidified what had previously only been suspected in my mind.

Translation: It ain't gonna happen.

At least not like they are selling it. Because of a refusal to confront the politics head on and get acceptance by the citizenry, the tough questions went unasked and unanswered. We asked 'how can we go on as we are without changing the way the upper and upper middle classes live' instead of 'green energy does this __________, therefore what changes like these ___________ need to be made in order to make it work'.

We're going to plow thru 1.5 C, then 2.0 C at about which time fossil fuels will have become much more expensive and we will need to switch to whatever we have. And we will go thru 2.5 C during the transition. We'll probably end up 2.5 to 3 C above normal. Green energy cannot replace brown energy if it is asked to do everything brown energy does. But it is what we will have at that time.

Big oil only supplies what we as a society demand. And what we demand cannot be met with green energy without some major breakthroughs. But we can't or won't change. And we cannot even be honest enough to get honest data with which to clarify the problem. It's a mess and it will continue to be a mess.

But here is where I disagree with most people who believe in climate change: There will be winners as well as losers. And we aren't going extinct. The reality won't be anywhere that romantic.

Will

[BarryBobPosthole]

I still think EV’s will only have any kind of effect on pollution will be when everybody wants one. And they prolly won’t want one to fix the climate, either. It’ll come down to some dweeb in Marketing, not somebody in Engineering.

BKB

[Penguin]

You may well be right about that Posty.

There has to be some combination of acceptance, because of either want or feeling of duty, that is pretty high before they will make much of a difference. The thing that gets me in trouble with my peers is this: I don't think you can 'educate' your way to this point. There is probably no one person on the planet that understands enough of the whole theory as to make a conclusive judgment that "This is real and we are 100% certain of it."

And I ain't one of them.

So trying to convince someone thru this method is, I believe, doomed. What would work, and this is the part for which I get roasted, is if the real movers and shakers in our society showed that they were so convinced that this is real that THEY changed the way they lived. To show that they are so concerned with climate change that THEY voluntarily lowered their standard of living to lower their impact on the planet. Now that, I think, would work.

So I would add the elite of a society to the marketers you mentioned.

Will

[BarryBobPosthole]

That's why this story caught my eye. Big oil is making a significant investment in energy futures other than oil. And like I said these guys don't play.

BKB

[Penguin]

Could be you are getting the right read on this. And I do think that big oil per se is making moves.

I think they are looking at the political landscape and hearing the politicos shouting "We are going to put you out of business in a decade or two!" And then they look at the cost of finding new fields and getting them online. Finally they look at the decade that this would take..... factor in how much more difficult this is becoming as oil becomes less easy to get to and exploit. Well you don't have to be an Einstein to see where you need to move your investments.

And I don't argue that this is the right move. I just don't think it will bring anything other than what it brought to the UK and Germany.

I think we need a complete rethink. We need what might be called a brown build out. Where we detour a certain amount of fossil fuel energy each year into green energy, but without worrying about "growth". Because green energy is gong to kill the economy either way. So you take a certain percentage of oil/coal each year and put it into windmills and such. And you increase it as you go. That won't keep the status quo alive but it will at least give you something in 20 years to limp along with.

But first you have to admit that to stop climate change you have to stop growth. Probably not in the cards.

Will

[BarryBobPosthole]

Good topic!

I think you are spot on about how badly people underestimate just the pure inertia and the effort it’ll take to overcome it. It will happen. Butnot like we think. Another reason this caught my eye is big oil might be the only entities equipped to make it happen.

It sounds pretty pessimistic, for me anyways, but I think some apocalyptic type shit is about to happen that will force our societies to fundamentally change. There just isn’t infrasructure to weather all the storms, and if the real weakness of our most critical processes didn’t open our eyes during covid then we really aren’t paying attention to the important stuff.
I think our futures will be necessarily more agrarian, more regionally sourced, and the haves and have nots will be determined much more by geography and natural resources than they are today. Distopian maybe, but I can’t see the path we’re on being successful much longer.

BKB

[Penguin]

Yeah, truth is I expect to be surprised a lot as it plays out. Heaven knows it has surprised me so far many times.

There are two things that I think would make it easier. One would be to consider fairness. Let's be honest here, when the elite talk about needing to eat cricket burgers to save the planet they're talking about us doing it not them. And everyone knows it. When they speak in glowing terms about EVs they mean Mustang eMachs for then and we ride buses. And everyone knows it.

Shared sacrifice would go a long way here.

Second I think maybe small is better. Think small scale home sized power not multi national corps and billion dollar research budgets. Things individuals can build or install.

[BarryBobPosthole]

There is a very good documentary on a part of US history that is very similar both socially and politically to now, the late 19th century. The doc is called 'The Gilded Age'. (not the soapy HBO series, the American Experience show on PBS)

BKB


ps....Thumper LOVES cricket sammiches

[quercus alba]

My neighbor just installed a solar panel array that is supposed to power his whole house and even allow the local electric service tap into what's stored......about 40G is what he paid. That's about 17-20 years worth of electric bills. At 65 years old that's not what I call a prudent investment

[Thumper]

Did those panels and controllers come with a 20-year warranty and will the company still be around to administer that warranty if he has problems down the line? Does he have a battery bank? Does he have air conditioning? My brother-in-law has solar and has spent 80K on just batteries so far. ((From flooded cell (disaster), to AGM and recently to lithium))

[quercus alba]

to be honest I wasn't interested enough to ask those kind of questions, I was just making conversation

Oh, and your BIL obviously has too much money

[Thumper]

Probably so. He was here recently and I drove him to Tampa to find a part for his Corvette. He received a phone call and I only heard his side of the conversation.

It went something like this:
“Hello”
“How does it look?”
“Ok, buy it”
“See you in about a week, bye”

I asked what he’d just bought and he said, “Another house.” Note: When he retired he decided to buy houses and rent them out. I asked how many he has now and he said, “That’s number 30!” I asked how much he’d just paid for that house and it was something $350K. I said, “Damn! That much for a rental?” He said he won’t buy anything under $250K. I then asked how much frigging interest he pays on THIRTY frigging houses and his response was, “Interest is just throwing money away, I only pay cash!”

So, I guess you’re right, he just has too much money. :(

[Chicken Dinner]

I’m hesitant to question somebody’s judgement that’s got way more money than me. But, I don’t know too many real estate investors who aren’t using leverage to offset the income. Poor tax planning at a minimum. Maybe that’s just a sign of how well off he is.


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[Thumper]

C/D, I have no idea what his financial details are, but I trust his business acumen. He and my sister met in h/s and both worked at KFC as kids. After they got married (they had nothing), he decided to start a small seal and gasket company catering to the oil and gas industry refineries. (They live in Houston) When we moved from Cali to Florida in ‘89, we stopped to visit for a few days.

He had partitioned off his 2-car garage and one side was dedicated to his start-up business. He was buying seals and gaskets from China and repackaging them in packages with his company name on them, then marketing them.

I asked whether he was incorporated and if he carried liability insurance. He was clueless. I informed him that once he repackages those items, they are HIS product and responsibility. I asked who he thought Shell Oil would sue if one of his seals failed and half of Houston exploded in a big fireball. He was still a kid and I just pass this on here as to how he started out.

He incorporated, got coverage and grew from there. He was eventually able to rent a small building and expand. When the recession hit the oil and gas industry around 1990 (?), the market collapsed and the mega-suppliers went out of business or diversified their services to other fields. The refineries had to keep running, but they’d lost the backup from the repair industry. My BIL stepped in to do whatever he could to keep the plants up and running.

The industry eventually recovered and the big boys rolled back into town to start back up where they’d left off. The “industry” told them to fuck off and asked where they were when they REALLY needed them? My BIL became their go-to guy and within a few years he’d built a large building (he owns the bldg and property), purchased a fleet of trucks, hired staff and in a few years became a major player in the field and became a bazillionaire.

That’s it in a nutshell with maybe a bit of over-simplifying, but he worked his butt off (as well as my sister who handled all the invoicing and related office work) to get where they are today. A rags to riches story and nobody handed him anything. He retired, then turned the business over to his youngest son and it’s still thriving. I asked my sis why he fools with these rentals and she says it “gives him something to do”! On the upside, he makes a buttload of money at it and says if he ever had a cash flow problem, he can always sell a house.

They have a ton of property he built a family compound on for recreation. That’s where he has his solar set-up as there is no electricity available. They also have two beach front condos (South Padre Island) and an extremely nice house in Houston. Heck, he has management companies handling the rentals and he and my sis spend most of the year traveling and on cruise ships.

Needless to say, since my suggesting the incorporation and liability insurance in those early days, I don’t argue with his business decisions. He kind’a left me in the dust in that regard. :(

[Hombre]

CD - Agreed on the leverage. We generally figure if we can make 12% on a house that is purchased out right, then we can get north of 20% if we leverage. We generally try not to leverage too much and still put 40+% down, which a lot would say that's limiting your ability to buy more houses. Another tax strategy we take advantage of is having segregation studies done on our STRs, which allows us to accelerate depreciation.

[BarryBobPosthole]

Hombre has evolved into tycoondom.

Fly your damn jet out here and take me fishing! Somewhere warmish.

BKB

[Penguin]

Those solar systems cost serious coin don't they. Out of this man's humble budget.

Not a bad idea if you can afford it tho. Most people I've talked to who have one say it is like paying your electric bill years in advance but doesn't save you a lot.

Often as the power goes out up here I would like one myself.

[BarryBobPosthole]

They are advertising here on TV a lot. They're offering 'free' generators as part of the package.

BKB

[Thumper]

My BIL bought a large tract of land above San Antonio, on a hilltop. He built a “family compound” up there …. I dunno, for the apocalypse maybe? It’s super cool actually, all self contained. It’s his “toy” out in the middle of nowhere.

He built a cabin for he and my sister, plus one for each of his two boys and their families. There’s also a large “utility house” with washer, dryer, large freezer packed with food, dry goods storage and etc. There’s a large “bunkhouse” for guests. Each of these (except for the laundromat) has a full bathroom, kitchen w/appliances, bedroom and livingroom. Each has heat, a/c and large flatscreen tv with satellite service and WiFi.

There’s a huge “party house” a large kitchen, refrigerator, freezer, giant living room, bar and a humongous tv (75” I think?). It also has a bedroom, full bath and all amenities. He has another building that is a shop and maintenance shed, packed with tools, tractor, mowers and any maintenance equipment you’d ever want.

There’s another building that holds all the solar equipment, batteries, controllers, etc. It’s also air conditioned. He has a solar panel array that looks like it could power NASA. He also has a pump house (he dug a deep well) with its own solar panels and large storage tank for water. There are a couple of bbq areas with gas grills, smoker, tables, running water, etc.

Now, I may be forgetting something, who knows? At the back of the property, hidden from the main compound, is another cabin where a full-time maintenance guy lives.

Quite a few times (the last time was October) he and I have gone up to spend a few days just kicking back. There’s a large fire pit in the center of the compound with seating for ….. well …. hanging out roasting marshmallows, s’mores or sharing a jug of Texas shine. ;)

The road from the highway (farm road actually) is about a mile long, so it’s about secluded as you could ever want.

One boy goes up every once-in-a-while, the other boy has been there once. They have different priorities. My BIL and I both love it, so he likes when we visit. He’ll call his maintenance guy and give him a heads up that we’re heading that way. He’ll make sure all the mowing is done, everything is in tip-top shape and have plenty of firewood chopped and stacked … plus a pile for the fire pit. (I forgot to mention, the cabins have gas heat as well as a fireplace) There are always enough groceries to stock a large Sam’s Club already stored, but we DO have to cook to eat. :(

Oh, I forgot one thing, in case the solar should go down for some reason, he has a VERY large diesel generator (also in its own building) and something like a 300-400-500 gallon (?) fuel tank. It’s set up to switch over to generator automatically if needed. There’s also a humongous propane tank to supply the stoves, heaters and water heaters.

Cool place, but I have no clue what he has invested in it. Probably more than I’ve made in my lifetime.

[Hombre]

Hombre has evolved into tycoondom.

Fly your damn jet out here and take me fishing! Somewhere warmish.

BKB

Believe it or not I thought there might be an opportunity for you to come to the warm weather. When you posted about spring training the other day I went an looked up where the Cards do their spring training. Half the league is in AZ and half in FL. Unfortunately the Cards are in FL, figured if they were in AZ I could have bribed you into coming over to PHX.

[BarryBobPosthole]

What kind of fishing opportunities do you hav there?

BKB

[Thumper]

I’ve been staying in touch with Buckrub. He and his wife have become snowbirds the last few years and have been spending their winters down here. He drives his truck and pulls the camper. She drives the suv and pulls the boat, so they don’t camp, they RELOCATE!

They’re close to the Card’s Spring Training camp, so they’re happy. In fact they have tickets to a couple of games (2/27 & 3/2). They’re right on the east coast, just below the cape, so I called him a week or so ago to tell him to look up as SpaceX was launching a rocket. He was already ahead of me and sent this back.

https://uploads.tapatalk-cdn.com/20230209/ed7176284c52a4e4d2b83d13e5502437.jpg

This morning I let him know the specks (crappie in his part of the world) in this area are spawning and limits are being caught in most areas.

He immediately sent this back to me.

https://uploads.tapatalk-cdn.com/20230209/035af5c726b34d2a22df91f61877041d.jpeg

I guess I’ll probably by slipping over to the coast to personally tell the old fart to bite me in the next couple weeks.


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[Hombre]

Most I know BBP is there's water and with water you can sit with a line in the water and drink beer.

[BarryBobPosthole]

Like this you mean?
BKB

13231

[Hombre]

Best way to fish right there!