Hello Everyone,
The longer it doesn’t rain the fewer people fix their roofs. Then when the water does come down it drenches everything.
I am going to start this article by saying that I am a staunch advocate of the necessity to curb the use of carbon fuels and reduce greenhouse admissions in an attempt to control the speed of global climate warming. It is definitely a “now” problem which if not tackled could become a catastrophic problem for the human race of the future. The question for me is how long is “now”?
There are many renewable actions that are being advocated in the UK where I believe the timescale set for completion could be their downfall. Just throwing money (tax-payers money) at random projects without a co-ordinated plan is not a recipe for success. Think Covid. Yes, it was a positive outcome for most, but how much money was wasted?
These are a few of my thoughts on renewable projects where I simply do not understand the logic or the anticipated timescale being set for success. A goal without a plan is just a wish.
Changing over car propulsion from diesel/petrol to electric within the time proposed is becoming a problem today, let alone in the future. Quadruple the number of electric vehicles on the road and then consider the number of charging points, batteries, and the sheer amount of electric energy that will be required.
In addition to this there will be the requirement for extra power to run heat pumps which are going to take over from gas boilers. That is assuming we have enough installation engineers, and people have enough money to pay for the pumps.
Now consider how our electricity grid would cope. The simple answer is that it would not. It would have to be re-engineered, also at vast expense, in order to cope with this enormous extra energy demand. Fail to do that, and we would enjoy the South African delights of eight hours a day of random power cuts.
Where will the electric energy be generated in the amount that will be required?
Wind and solar power will never replace anything like the volume of the fossil fuel power generators. Nuclear power is the missing component. This would provide the balance but unfortunately reactors take ten to fifteen years to design and construct. That is unless you use an already designed functional and operating small unit such as that built by Rolls Royce, which is already being used in today’s nuclear submarines and aircraft carriers. Those in charge seem reluctant to push the start button on this until they have received quotes from other countries. Speed, security, and use of home labour does not seem to be considered a priority.
And how will we produce enough batteries? The construction of giga factories to manufacture lithium batteries does not appear to be in step with the supply of lithium. It may only take one year to construct a giga factory, but it takes around ten years to build a lithium mine.
It appears that no critical path analysis and no joined-up thinking has been conducted regarding the enterprise as a whole. It may be that politicians, scientists, the media and glue-wielding activists are hoping for some new technology to save the day.
The whole business seems to be like the story of the emperor’s new clothes … however foolish, these people are all walking in step.
Climate control is so important for the future, it must not fail. I really feel that there is going to be a back-lash against net zero on the present timescales. Hopefully this might create a much needed and constructive re-think which results in the creation of a multi-skilled, non-political, “War Cabinet”. A team that understands the Japanese saying, “to succeed with a project it is better to take small steps quickly.”
From our point of view, as investors, the switch away from fossil fuels will not be instant and so there will be a continuing demand for oil and gas. This could lead to higher prices, both for renewables and fossil fuels, especially as the same businesses are involved in the supply of both. Like today, it will be cartel time. If there is any truth in the above, we are likely to see an increase in the value of energy funds and this could be an opportunity for fund investors.
There are three that come to mind, and there will be many others, but these three are currently showing in the Saltydog numbers.
Two other areas for possible future investment are receiving good press at the moment. These are India and Mexico. Richard recently wrote up the reasons why India could be “the place” in one of his weekly updates. This is well worth a read, and sits alongside the Saltydog figures which have consistently been showing favourable numbers in the specialist sector.
Keep an eye on
Mexico is the other area worth a really good look, for a number of reasons, one being due to the poor relationship between USA and China. Mexico has now moved ahead of China to become the largest exporter to the US. Secondly, the USA move to more “nearshoring” purchasing will further increase Mexico’s sales, as it will for the rest of South America. Recently I was amazed to read that just about all the major car companies in the world have manufacturing facilities in Mexico. (American, European, Japanese, Korean and even Chinese).
Mexico is part of the USMCA trading agreement between the USA, Mexico and Canada. This will continue to increase trade as Mexico moves into the high tech arena. It also has an abundance of young qualified engineering graduates ready to take up their role in industry. On top of this it is self-sufficient in its energy requirements using homegrown oil, gas, and coal. This they say is intended for use whilst they move over to renewables. Well, that is wait and see time!
So with the above in mind, I have been looking for a fund that I can invest into that covers Mexico. Unfortunately, to date I have been unsuccessful, but if any of you know of such a fund, I would be very grateful to hear from you. Yes, we could invest directly into Mexican Banks and Infrastructure companies, but I am really looking for a Unit Trust, OEIC or Investment Trust.
There are stormy days and sunny ones, but you need to look after the boat and think of the whole voyage. Let us hope that this will also apply to global warming over the long term.
The longer it doesn’t rain the fewer people fix their roofs. Then when the water does come down it drenches everything.
I am going to start this article by saying that I am a staunch advocate of the necessity to curb the use of carbon fuels and reduce greenhouse admissions in an attempt to control the speed of global climate warming. It is definitely a “now” problem which if not tackled could become a catastrophic problem for the human race of the future. The question for me is how long is “now”?
There are many renewable actions that are being advocated in the UK where I believe the timescale set for completion could be their downfall. Just throwing money (tax-payers money) at random projects without a co-ordinated plan is not a recipe for success. Think Covid. Yes, it was a positive outcome for most, but how much money was wasted?
These are a few of my thoughts on renewable projects where I simply do not understand the logic or the anticipated timescale being set for success. A goal without a plan is just a wish.
Changing over car propulsion from diesel/petrol to electric within the time proposed is becoming a problem today, let alone in the future. Quadruple the number of electric vehicles on the road and then consider the number of charging points, batteries, and the sheer amount of electric energy that will be required.
In addition to this there will be the requirement for extra power to run heat pumps which are going to take over from gas boilers. That is assuming we have enough installation engineers, and people have enough money to pay for the pumps.
Now consider how our electricity grid would cope. The simple answer is that it would not. It would have to be re-engineered, also at vast expense, in order to cope with this enormous extra energy demand. Fail to do that, and we would enjoy the South African delights of eight hours a day of random power cuts.
Where will the electric energy be generated in the amount that will be required?
Wind and solar power will never replace anything like the volume of the fossil fuel power generators. Nuclear power is the missing component. This would provide the balance but unfortunately reactors take ten to fifteen years to design and construct. That is unless you use an already designed functional and operating small unit such as that built by Rolls Royce, which is already being used in today’s nuclear submarines and aircraft carriers. Those in charge seem reluctant to push the start button on this until they have received quotes from other countries. Speed, security, and use of home labour does not seem to be considered a priority.
And how will we produce enough batteries? The construction of giga factories to manufacture lithium batteries does not appear to be in step with the supply of lithium. It may only take one year to construct a giga factory, but it takes around ten years to build a lithium mine.
It appears that no critical path analysis and no joined-up thinking has been conducted regarding the enterprise as a whole. It may be that politicians, scientists, the media and glue-wielding activists are hoping for some new technology to save the day.
The whole business seems to be like the story of the emperor’s new clothes … however foolish, these people are all walking in step.
Climate control is so important for the future, it must not fail. I really feel that there is going to be a back-lash against net zero on the present timescales. Hopefully this might create a much needed and constructive re-think which results in the creation of a multi-skilled, non-political, “War Cabinet”. A team that understands the Japanese saying, “to succeed with a project it is better to take small steps quickly.”
From our point of view, as investors, the switch away from fossil fuels will not be instant and so there will be a continuing demand for oil and gas. This could lead to higher prices, both for renewables and fossil fuels, especially as the same businesses are involved in the supply of both. Like today, it will be cartel time. If there is any truth in the above, we are likely to see an increase in the value of energy funds and this could be an opportunity for fund investors.
There are three that come to mind, and there will be many others, but these three are currently showing in the Saltydog numbers.
- BGF World Energy
- TB Guinness Global Energy
- Schroder ISF Global Energy
Two other areas for possible future investment are receiving good press at the moment. These are India and Mexico. Richard recently wrote up the reasons why India could be “the place” in one of his weekly updates. This is well worth a read, and sits alongside the Saltydog figures which have consistently been showing favourable numbers in the specialist sector.
Keep an eye on
- Jupiter India
- Liontrust India
- GS India Equity
Mexico is the other area worth a really good look, for a number of reasons, one being due to the poor relationship between USA and China. Mexico has now moved ahead of China to become the largest exporter to the US. Secondly, the USA move to more “nearshoring” purchasing will further increase Mexico’s sales, as it will for the rest of South America. Recently I was amazed to read that just about all the major car companies in the world have manufacturing facilities in Mexico. (American, European, Japanese, Korean and even Chinese).
Mexico is part of the USMCA trading agreement between the USA, Mexico and Canada. This will continue to increase trade as Mexico moves into the high tech arena. It also has an abundance of young qualified engineering graduates ready to take up their role in industry. On top of this it is self-sufficient in its energy requirements using homegrown oil, gas, and coal. This they say is intended for use whilst they move over to renewables. Well, that is wait and see time!
So with the above in mind, I have been looking for a fund that I can invest into that covers Mexico. Unfortunately, to date I have been unsuccessful, but if any of you know of such a fund, I would be very grateful to hear from you. Yes, we could invest directly into Mexican Banks and Infrastructure companies, but I am really looking for a Unit Trust, OEIC or Investment Trust.
There are stormy days and sunny ones, but you need to look after the boat and think of the whole voyage. Let us hope that this will also apply to global warming over the long term.
Best wishes and good luck with your investments.
Douglas
Founder & Chairman
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