The Third Major Energy Transformation

Published on
May 21st, 2019
Duration
33 minutes

The Third Major Energy Transformation

The Expert View ·
Featuring Rob West

Published on: May 21st, 2019 • Duration: 33 minutes

Rob West, founder of Thunder Said Energy, explains that the energy markets are in transition for the third time in 200 years. New technologies are at the heart of this transition to more abundant and cleaner sources of energy. If investors continue to favor short-term returns over long-term projects, the potential for extreme spikes in future oil prices will only increase. Filmed on May 14, 2019 in London.

Comments

Transcript

  • PG
    Philippe G.
    2 June 2019 @ 20:04
    Excellent. Learned quite a bit in about 30 mins!
  • AP
    Andrew P.
    30 May 2019 @ 16:29
    IRR discussion was good. Blows my mind how much lower the hurdle rate is for energy vs mining in general. Hard to imagine this future balance transition without nuclear imo.
  • SB
    Stephen B.
    26 May 2019 @ 20:04
    I am not convinced. The thing about technological breakthroughs is that they are unpredictable. Ten to twenty years ago the big bets were on hydogen fuel cells but it never happened. The penetration of renewables in the energy mix are dependent upon a break through in grid scale energy storage which continues to prove illusive. Moreover, energy preferences are cyclical. Nuclear was out of favor for decades but made a come back. Controversially, I predict the same thing will happen to coal (particularly as we learn more about how uncertain the supposed CO2 impact has on the environment).
  • WM
    Will M.
    26 May 2019 @ 14:39
    Excellent episode, with a clear bias of optimism from an engaging, knowledgeable and enthusiastic presenter. I would endorse the thoughts of Goehring & Rozencwajg commentary on the energy market to RVT viewers, its free and detailed. They are less enthusiastic about shale production growth that Rob West is, however, the point is they also believe big energy spikes are coming from the lack of investment in big oil. I have spent over 40 years in the oil business and work for a company that is growing supply and reserve and is investing heavily in near term production. Another oil spike is coming perhaps sooner rather than later and as Jim Grant said,...the inevitable is certain but not necessarily punctual! Oil at $125+ is certain.
  • ii
    ida i.
    26 May 2019 @ 13:34
    I really loved this, but what about fuel cells and hydrogen? firms like Powercell Sweden, Nel Asa, Ballard ...? could Mr. West comment on this? thanks in advance
  • VD
    Vinay D.
    23 May 2019 @ 21:53
    Hi Rob any thoughts on the oil service companies ? Slb, Hal? Thank you
  • ab
    aaron b.
    23 May 2019 @ 14:57
    The problem with a lot of things like this is they don't actually make it out of the lab. Such as the endless battery breakthroughs every other day on science news sites. Does plastic pyrolysis being able to displace 15 Mbpd sound reasonable? https://www.lowimpact.org/pyrolysis-not-solution-plastics-problem/ https://www.sciencedirect.com/science/article/pii/S0921344918304117?via%3Dihub Infinite Recyclability is more interesting, less energy intensive: https://newscenter.lbl.gov/2019/05/06/recycling-plastic-from-the-inside-out/ Airborne wind has also been around a long time... One that actually seems likely and would be THE MOST TRANSFORMATIVE is what Carbon Engineering is doing. Co2 direct air capture to create fuel, for enhanced oil recovery and sequestration. They just teamed up with Occidental and Chevron to build a site. $100 a ton carbon capture is what they figure.
  • GS
    Gerold S.
    23 May 2019 @ 10:15
    As a long-term investor, I am dependent on precisely such information. I can't get that from any bank. I would like to have an update from Mike Alkin on the subject of uranium.
  • gs
    gerald s.
    23 May 2019 @ 00:22
    wow. this Tuesday series is excellent.
  • CH
    Charles H.
    22 May 2019 @ 23:16
    I seems that nuclear fission and fusion are totally irrelevant to the global energy market, not even worth mentioning once, but kites in the sea are the new thing. Better tell the North Americans and Europeans.
    • JM
      Jez M.
      23 May 2019 @ 10:03
      yes I found it strange too
  • SH
    Steve H.
    22 May 2019 @ 22:28
    WTF? Like most “energy expert’s” he has his nose too far up oils butt. He lists five of the largest energy trends and doesn’t mention hydrogen (or nuclear) anywhere? IMO hydrogen will be of growing importance in the energy world and this company has the “potential” to be the game changer. https://www.theherald.com.au/story/6080537/technology-breakthrough-could-replace-coal/
    • WM
      Will M.
      26 May 2019 @ 14:00
      Steve, I think the thumbs up for this episode put you in the wrong corner by a wide margin. I have been in the oil business for 41 years so know a bit about it. Its had its day for sure, but the infrastructure to support it and the very usefulness of oil and gas to our civilization means its not going to disappear in anyone alive's lifetime. Gas is already supplanting oil for energy generation, however more efficient engines will drag out gasoline vehicle use for decades. Demand for oil will fall only slowly from a likely peak in the next decade. The price will however head back over $100 barrel, after perhaps one more plunge below $50 in the next 1-2 years. Thereafter the price will be off to the races. Oil and Gas will be the blood and oxygen of the industrial economy for another 20 years while Green and Nuclear gain an increasing share.
  • SP
    Sat P.
    22 May 2019 @ 21:21
    This guy’s passion for energy is awesome. I normally fall asleep when I listen to people talk about the energy sector but I paid attention and learnt a lot the whole way through this video. Can’t wait to see him again in future.
  • AJ
    Andy J.
    22 May 2019 @ 20:25
    Wonderful. Please put Rob in the rotation, Raoul! Any one of those five transformations could make a wonderful long-form, I would imagine.
    • AJ
      Andy J.
      22 May 2019 @ 20:28
      Rob also shows the verve of someone who is really having fun at what he is doing...
  • TN
    Thomas N.
    22 May 2019 @ 14:34
    Fantastic video. Clear, concise, powerful, differentiated.
  • PJ
    Peter J.
    22 May 2019 @ 12:07
    Brilliant, this should be posted to the outside audience. Would love to see a (regular) follow up.
  • ET
    Eduard T.
    22 May 2019 @ 09:43
    Great!
  • SR
    Steve R.
    22 May 2019 @ 09:29
    Wow! That was awesome! I certainly learn't something new tonight. Just brilliant.
  • SU
    Shakeel U.
    22 May 2019 @ 05:34
    Superb 😀
  • AC
    Andrew C.
    22 May 2019 @ 04:20
    Great presentation with significant deficiencies though (nuclear!). Regarding electrification. Electricity is not a source of power, it is a means of transferring power. So how does this impact his statement on efficiency of ICE versus EV, when the electricity has to be generated from a true power source? I believe sometimes these "interviews" really need an interviewer!
    • RW
      Rob W. | Contributor
      22 May 2019 @ 06:08
      Hi Andrew, thanks, and sorry this wasn’t clearer in my comments. Your point is spot on, we need to look at the fuels!! There are lots of models on my website doing this, particularly for gas, where demand can treble by 2050. I’m especially excited by gas-powered fast-chargers! www.thundersaidenergy.com
  • WB
    William B.
    22 May 2019 @ 03:51
    Fascinating. I’d could soak up his knowledge all day long. When is Rob coming back to RV?
  • JH
    Jason H.
    22 May 2019 @ 03:40
    If the economic climate doesn't support it "carbon emissions" will not be a factor.
  • RD
    Randy D.
    22 May 2019 @ 03:27
    #6 Nuclear
  • NR
    Nelson R.
    22 May 2019 @ 03:11
    A
  • CL
    Clinton L.
    22 May 2019 @ 01:02
    The opposed piston internal combustion engine if bought to market may come somewhat close to its 40% conversion efficiency. This is about double the conversion efficiency of todays marketed ICE. An opposed piston engine isn't marketed yet in its somewhat rough form that is on trial in a Ford F150 at Aramco facilities providing about 37 miles per gallon.
    • JH
      Jason H.
      22 May 2019 @ 03:28
      Koenigsegg FreeValve is one technology that will make a big difference. Quote... "The FreeValve engine was installed in a Qoros 3 hatchback when it was unveiled at the Beijing show. With the FreeValve modifications, the 1.6L turbocharged engine was able to achieve a 47% increase in output to 230 hp; a 45% increase in torque, to 236 lb.-ft. (320 Nm); and a 15% reduction in fuel consumption, the company says. "
    • RW
      Rob W. | Contributor
      22 May 2019 @ 06:10
      Yes! You wouldn’t believe how many vehicle concepts Aramco has patented. Thanks for this, will enjoying digging further into it...
  • CB
    C B.
    22 May 2019 @ 00:53
    I used to think it was unreasonable to exponentially grow consumption of energy, indefinitely into the future. I am changed now :) It is a complex question, however will the fast shale depletion rates (that many analysts have underestimated) allow shale to serve all the way through the transition period? What about the enormous subsidy that renewables enjoy from oil, in their build out and maintenance. What about Chris Martenson's point that every prior transition was from a less dense to a more dense form of energy. And now we are talking about going from more dense (oil) to less dense (renewables). And can these new technologies really overcome the fact that net energy (from oil) has been decreasing over the last 50 years from 70:1 to 7:1. If we expend a barrel for every barrel that we bring up out of the ground, because we are drilling five miles deep into shale, turning left and going another 5 miles, are the economics very compelling, or have we just destroyed the capital. I am not as keen on the techno optimism, look at today's techno optimism, the story always outpaces the reality/implementation (UBER, TSLA, insert cash burning machine here). I really think we may be surprised to learn that the future is not bigger with exponentially growing extraction of earths resources, but instead smaller with resources distributed differently. That said what an incredible interview with a professional who has been intentional about developing his knowledge in this specialized area.
    • RW
      Rob W. | Contributor
      22 May 2019 @ 06:16
      Thanks, some great Qs in here. We could do a whole follow up interview on this!
    • AC
      Andrew C.
      22 May 2019 @ 07:06
      Hi CB. I suggest you have a look at Goehring & Rozencwajg Market Commentary. There are some great charts with a nation's GDP per capita against oil demand, which ramps up to a plateau. Many developing countries are starting the ramp (India is the big one). So consumption of energy doesn't grow indefinitely into the future; it grows then plateaus. So I concur with Rob's view (if I understood him correctly) that short-term-ness will lead to a rather large spike in the price of energy (particularly oil)
  • DR
    David R.
    22 May 2019 @ 00:29
    Good discussion and transcript !! Pls keep 'em coming.
  • SS
    Steven S.
    21 May 2019 @ 23:16
    Exceptional!
    • sz
      steve z.
      22 May 2019 @ 00:12
      I 🤲👎👎👎👎👎👏🏻👏🏻👏🏻👏🏻👏🏻👆👆👆👆👆👌👌👌👌👌👌👌👌👌👌✌️✌️✌️✌️🤛💪🖖✋👃z. Sz.have a qss right next 🦷💄💄💄🙏🙏🙏🙏
  • JE
    James E.
    21 May 2019 @ 22:03
    Great research by Rob, the major point I feel is the decrease in supply of fossil fuels before other forms of energy are available. Yet again "the madness of crowds" rises again in climate change, hopefully the energy transformation has the "political will" to run smoothly. :)
  • DS
    David S.
    21 May 2019 @ 21:09
    Excellent period. DLS
  • JH
    Jesse H.
    21 May 2019 @ 21:05
    Great interview - he is a bit naive in his views, however, and did not give much air to the contrarian viewpoints, which as a former energy industry engineer and project manager, I could list pretty readily. Very green around the ears - we need this optimism, and I love Rob’s energy, but it has to be tempered by experience, worldly savvy and judgment (which tends to come through experience).
    • AC
      Andrew C.
      22 May 2019 @ 03:38
      Please elaborate. I concur with his view on total energy needs as EM seeks a better life. Nuclear was a huge omission. I don't see much more he missed.
    • me
      mike e.
      22 May 2019 @ 04:18
      How so?
  • PP
    Peter P.
    21 May 2019 @ 20:14
    Loved this interview. I follow Rob’s new consultancy at www.linkedin.com/company/thunder-said-energy (Full Disclosure the links promote his paid research/I have no part or interest in his firm) - but what always distinguishes Rob is that he makes you think & discuss his ideas with others. I know last year Rob was talking Texas as the future OPEC if they plowed the cash flow back into infrastructure investment in shale, and this is contentious as numerous interviews on RV have said shale will be a bust, but anyone following EIA reports on oil are 6 months+ behind the data Rob has shown in the past -> pointing to individual known Permian wells that were producing 10x the number of barrels that the EIA was forecasting. Look forward to seeing/hearing more from Rob. Thanks RV
    • DR
      David R.
      22 May 2019 @ 00:27
      Isn't the legacy of shale in the US likely to be more frequent and bigger earthquakes, even in areas that never previously experienced them? And poisoned acquifers? An environment catastrophe in the making. (And btw, I'm no tree hugging environmentalist; I oppose carbon taxes and the unproven notion of manmade global warming or climate change or whatever they rename it to fit changing weather patterns on Earth caused by the solar cycle)
    • RW
      Rob W. | Contributor
      22 May 2019 @ 06:14
      Huge thank you Peter! Yes, happy to be contacted on LinkedIn, or via Thunder Said Energy’s website. Shale remains a great opportunity, far outweighing the challenges. Models and data-files on my site. And lots more deep-dive work coming on the best, emerging shale technologies...
  • TY
    Tyler Y.
    21 May 2019 @ 19:37
    I love the prohibition example as well as Rob's other insights. This was a wonderful interview. Bravo!!
  • ER
    Ernesto R.
    21 May 2019 @ 18:07
    one of the best interviews I have listened to on RV, learned a lot!
  • AB
    Anne-Marie B.
    21 May 2019 @ 18:01
    What a wonderful enthusiasm-loved this interview
  • PB
    Pieter B.
    21 May 2019 @ 16:16
    Awesome Rob! Thank you!
  • RE
    Richard E. | Contributor
    21 May 2019 @ 15:56
    Extremely interesting views. Hope you have more from Rob. It would be interesting to have Andy Lees from MacroStrategy on as I think he might refute many of Rob's points. Even if it was a discussion between the two of them. I think there would be some point/counterpoint between two very well read and well spoken analysts
  • CJ
    Charles J.
    21 May 2019 @ 15:51
    I hate to say this because its totally not the point of the interview, but my biggest takeaway was that the greatest investment opportunity in energy is coal.... He's essentially saying that investors require an IRR of 40% to fund a coal project and he is concerned that there will be an energy shortage in the future..... Obviously, it is far more complicated than that, but it does make you think.
  • JR
    Jeff R.
    21 May 2019 @ 15:38
    Really informative and thought provoking....with one glaring exception. He does not even touch on nuclear energy. How can you talk about 60k terawatt hours of energy usage and completely ignore nuclear energy? A fantastic piece but it would have been more “balanced” if he had even just acknowledged the other major energy source...overall very good I don’t want to take away from the knowledge and insight he provided
    • RW
      Rob W. | Contributor
      22 May 2019 @ 06:04
      Thanks all, I would love a steer to your top, next-generation nuclear technologies? LinkedIn me! Currently I have nuclear at 2,600TWH in my models (almost exactly flat since 2000) and am hoping for 35TWH pa growth to 2050. Great if we can improve the risk-adjusted economics and do more.
    • AP
      Andrew P.
      30 May 2019 @ 16:48
      Currently ~50 nuclear reactors under construction right now. China along has 45 and 11 under construction now with a normal rate of 6-8 a year. Interesting piece about it in Northern Miner from Cameco CEO.
  • TT
    Trenton T.
    21 May 2019 @ 12:51
    One of the best pieces yet on RV. Outstanding views based on facts and observations, not hype/fearmongering.
  • GD
    Gerald D.
    21 May 2019 @ 12:32
    Very interesting. He should check out V3wind.com for a better wind technology option that is under development.
  • CB
    Cliff B.
    21 May 2019 @ 12:27
    Excellent!
  • Nv
    Nick v.
    21 May 2019 @ 11:16
    Brilliant. I learnt a lot. Thank you
  • MB
    Michael B.
    21 May 2019 @ 11:12
    The kind of enthusiasm exuding from this guy is inspirational. This is why its so important to listen to a lot of different perspectives to form a wholesome realistic view on any give topic.
  • RC
    Robert C.
    21 May 2019 @ 09:44
    Great Interview, evidence and research based content, simple to understand, and Rob seemed genuine excited in the industry as a whole. Please bring him back in 6 months to get an update on his thesis.
  • JF
    Josh F.
    21 May 2019 @ 08:09
    Great interview. Would like to see him talk with others in the energy world.
    • JF
      Josh F.
      21 May 2019 @ 11:21
      Rob w/ Art Berman or someone familiar with the work being done at the cutting edge of fusion. Both would be very interesting