Credit deflation and the reflation cycle to come (part 2)

[Heart's Ease]

https://www.cityam.com/uk-to-see-six-new-offshore-windfarms-in-drive-toward-net-zero/amp/?__twitter_impression=true

BP gets a mention - a joint venture. 

"BP embraces UK’s Green future

Oil major BP won two sites in the Irish Sea representing a total of 3 gigawatts in a joint venture with Germany’s EnBW.

Having entered the US wind market last year, it is the oil firm’s first move into Britain’s offshore wind market.

BP’s two wind farms are located in the Irish Sea (Credit: BP).

The JV will pay £231m for both leases every year until 2025, before a final investment decision is taken.

It is hoped that the sites, which provide about a third of the 10 extra gigawatts the UK needs to hit its 40 gigwatts target by 2030, will be operational in the next seven years.

The move is part of a broader plan from BP to move away from its oil and gas dependence over the coming years.

The new leases take its total wind power capacity to 3.3 gigawatts, the second largest of any oil major. It is targeting total renewables capacity of 25 gigawatts by the end of the decade.

Last week the firm reported a $5.7bn loss, its first in a decade, as the pandemic took its toll on the oil industry causing demands to plummet with blanket travel restrictions."

Another snippet - 

"The sites, priced on average at £82,552 per megawatt annually, are 110km from the North East coast of England."

[nomadic]

1 hour ago, DurhamBorn said:

Its actually very very sad the way Labour have become what they are.I worked with 100% unionised people and last election they nearly all voted Tory.Labour simply dont represent working people at all,they are their enemy in most ways,their policies forcing down wages,forcing up pension age because of forcing  and wanting mass immigration,forcing peoples daughters to choose welfare over stable family etc etc.The other very sad thing is the Tories take all those seats,yet have zero understanding why they won them.They think working class people want higher welfare,higher spending etc when they dont.Working people on mid to lower wages hate benefit scroungers with a passion.

The climate change religion is of course mostly rubbish.Planting our forests back,and paying poor countries to protect and expand theirs would solve it.What it really is is rich people wanting poor people to lose their cars,holidays etc while they carry on as normal.Thatcher would of had none of it.

You have smashed the nail on it's head and obliterated the immediate locality! We will own nothing but be happy. Pretty sure we've heard that one before!?

Take travel for instance. Australia has today announced that even the vaccinated will need to quarantine, at considerable cost. Will they ever roll this back? Who knows, but the super wealthy won't care as they'll get to dive the Great Barrier reef without swarms of annoying budget travellers around them.

[DurhamBorn]

1 hour ago, CVG said:

I used to work in a large actuarial department full of big bright brains. They'd run a sweepstake each budget day and guess the 'right' actions to be taken. They hardly ever won!

Iv got some long term roadmaps on fiscal costs for governments.The big rising one from around 10 years out is housing benefit.More renters means higher bills down the road.If they removed 40% tax relief and replaced with 25% for everyone they can lower the housing benefit bill be simply removing relief from higher earners and passing it to lower earners.

I also did cross market and the really big money spinner would be to slowly replace pensions with lifetime ISAs with 25% relief and access from 55.The beauty with that approach is from 55 they can count the capital and so no benefits,at least until the money runs out.Given the new state pension is set at pretty much the benefit level that lowers the bill.

We might see an expansion of those lifetime ISAs sold as a benefit for younger people,when really its a trap.This budget will be fascinating,and dangerous.

[Hancock]

1 hour ago, DurhamBorn said:

Its actually very very sad the way Labour have become what they are.I worked with 100% unionised people and last election they nearly all voted Tory.Labour simply dont represent working people at all,they are their enemy in most ways,their policies forcing down wages,forcing up pension age because of forcing  and wanting mass immigration,forcing peoples daughters to choose welfare over stable family etc etc.The other very sad thing is the Tories take all those seats,yet have zero understanding why they won them.They think working class people want higher welfare,higher spending etc when they dont.Working people on mid to lower wages hate benefit scroungers with a passion.

The climate change religion is of course mostly rubbish.Planting our forests back,and paying poor countries to protect and expand theirs would solve it.What it really is is rich people wanting poor people to lose their cars,holidays etc while they carry on as normal.Thatcher would of had none of it.

Oh yes the unions and their minions are traitorous cunts.

When up in Shetland in 2013 David Cameron was due to come for a walk around in 4 days time with the bigwigs from Total.

On the Monday the Scouse, Jock and Geordie pricks on site who think they're Arthur Fucken Scargill, called for everyone to down tools in some sort of strike due to health and safety issues. (apparently a gas bottle fell off the back of a lorry) Anyway it took 2 hours of negotiations to get everyone back to work.

But then the management said they would not be paying for the 2 hours where the directly employed workers and the agency staff were not working.

So on the day Cameron was due to come to the site, they called a strike, and there were hundreds of them at the gates stopping people coming onto site.

Now Cameron didnt come as it was deemed to dangerous, but after a full day of negotiating to get the 2 hours pay back, which they successfully did. They had to agree that all the same workers would lose a full days pay for an illegal strike on the Friday.

You just couldn't make up how fucken stupid these cunts are, they exist purely to agitate. the agency lad i had helping me was fucken fuming at losing a days money.

In my time there i done next to no work and for the last several rotations done no work at all, as they didnt want me to find problems with the pipe. So i was paid to play online poker, watch movies and go to the gym to kill my time.

But when i was walking past these union tossers to go back to my cabin, the mouthy fucken arseholes threatened that if i went to work they'd do me in. I only wish i had work to go to then i would have!

 

[DurhamBorn]

32 minutes ago, Democorruptcy said:

I think the pension age is on it's way up but that they will stick with the 10 year gap to allow people to access some money early. If people lose their job they will struggle to find another, as they get older, particularly if it's manual. Better for the governbankment, if people access pensions to provide for themselves instead of claiming benefits. It also brings demand from the future for the present chancellor, I can't see one wanting to gift a future one that spending.

Agreed,it would be crazy to do anything else.That 10 year gap looks certain to remain like you say.An outlier is they might even allow small withdrawals earlier if someone loses their job,maybe 2% of pot.

The worry is though is 25% of the population are probably unemployable outside of very basic stuff and keeping people working and paying tax will be a huge driver.On that though i suspect the way in to pensions is whats likely to be curtailed.

[jamtomorrow]

2 hours ago, DurhamBorn said:

Two huge Amazon's near me,1000 workers each,car park doesnt seem to have any electric cars in it.Workers on £10 an hour can afford them.Lots of older diesels.Boris's grand plan will see the likes of Amazon having to pay £15 an hour wages if they want workers,or the old way of busing them in themselves.

ICE powertrains in consumer vehicles look doomed anyway, irrespective of any energy policy case for/against EVs, and for reasons already very familiar to this thread: complexity, and in particular the absurd levels of supply-chain complexity needed to take a modern ICE to production.

(And if you think ICE supply chains are absurd, spare a thought for the Big Auto galaxy brains that thought now was a good time to double down on hybrids. Sorry, I meant "self-charging electric" )

In short: not sure why Bozza is deploying political capital on something that's likely to happen naturally anyway, as the cycle turns and decomplexification forces take hold.

[DurhamBorn]

6 minutes ago, jamtomorrow said:

ICE powertrains in consumer vehicles look doomed anyway, irrespective of any energy policy case for/against EVs, and for reasons already very familiar to this thread: complexity, and in particular the absurd levels of supply-chain complexity needed to take a modern ICE to production.

(And if you think ICE supply chains are absurd, spare a thought for the Big Auto galaxy brains that thought now was a good time to double down on hybrids. Sorry, I meant "self-charging electric" )

In short: not sure why Bozza is deploying political capital on something that's likely to happen naturally anyway, as the cycle turns and decomplexification forces take hold.

I think they are doomed,though its not certain yet because iv seen some work where methanol might come into the mix.You can run ICE cars on methanol,even better a mix with petrol and ethanol.I think the complex supply chains are the real danger as you say.Im seeing production lines shutting down for lack of a 50p gasket etc,its nuts,but shows what happens when you lose all your little suppliers.

[Democorruptcy]

9 minutes ago, DurhamBorn said:

Agreed,it would be crazy to do anything else.That 10 year gap looks certain to remain like you say.An outlier is they might even allow small withdrawals earlier if someone loses their job,maybe 2% of pot.

The worry is though is 25% of the population are probably unemployable outside of very basic stuff and keeping people working and paying tax will be a huge driver.On that though i suspect the way in to pensions is whats likely to be curtailed.

Upping the pension age to 70 would keep a lot of people working and paying tax. Then they contribute instead of drawing pensions. It only hits the little people because the "faces" will still retire earlier anyway. I think due to technology and automation more people will become unemployable. They just need enough aspirational hamsters running their wheels and signing up to 40 and 50 year mortgages. One of the main drivers behind their house price props is to keep people working longer to pay for a shelter. RM ought to display the number of hours of the average salary required to buy it, alongside the price.

[Yadda yadda yadda]

1 minute ago, Democorruptcy said:

Upping the pension age to 70 would keep a lot of people working and paying tax. Then they contribute instead of drawing pensions. It only hits the little people because the "faces" will still retire earlier anyway. I think due to technology and automation more people will become unemployable. They just need enough aspirational hamsters running their wheels and signing up to 40 and 50 year mortgages. One of the main drivers behind their house price props is to keep people working longer to pay for a shelter. RM ought to display the number of hours of the average salary required to buy it, alongside the price.

When life expectancy has started to go into reverse a lot of people will be angry about having to work even longer.

I know I'm preaching to the converted here but cut fucking benefits instead. Sad that we're in such a state as a country that no-one is expecting that to even be considered. Hopefully that will change when interest rates start going up as the cycle takes hold. Although retirement dates will have been screwed by then. Someone ought to do some calculations as to how much consumer retrenchment will be caused by people saving in order to control their own future to a greater extent.

Rant over back to work 

[Harley]

2 hours ago, DurhamBorn said:

Two huge Amazon's near me,1000 workers each,car park doesnt seem to have any electric cars in it.Workers on £10 an hour can afford them.Lots of older diesels.Boris's grand plan will see the likes of Amazon having to pay £15 an hour wages if they want workers,or the old way of busing them in themselves.

Big oil is laughing,signing up big companies for offtakes already knowing construction price etc.They are building bond funds paying 8%+pa really on top of their other business.

Just to say, being true to this thread, I yet again searched Amazon but bought off the supplier's own website at a discount.  Doesn't always work but enough times to work out good.

[DurhamBorn]

The BP release today about the wind bid wins in the Irish Sea is interesting on many levels.First it shows big oil will become some of the biggest renewable players in the world,and the dopey woke brigade have sold out of them all.Second the engineering skills they have transfer very easily.Third the big utility compnanies like pairing up with big oil.It means access to capital,experts in many areas needed and access to mass energy trading.

Big oils job is to keep nuclear down as much as they can because thats their real threat.Mid cycle as cost of capital increases they should have an easy time picking up assets.The Scottish play will surely get bought out at some points,though that nuclear holding is whats stopping it.Unless someone actually fancies funding new nuclear or could pump a bit of capital in and float it off as a seperate entity.

[harp]

Bitcoin 😳

Seems like Tesla bought $1.5 billion worth today according to zerohedge  🤔

[jamtomorrow]

46 minutes ago, Harley said:

Just to say, being true to this thread, I yet again searched Amazon but bought off the supplier's own website at a discount.  Doesn't always work but enough times to work out good.

Used Amazon to find something I wanted 2 weeks back, bought it on eBay because cheaper and f**k Jeff Bezos, only for it to arrive via Amazon fulfillment anyway. Seems Jeff always gets his slice, one way or another?

 

[DurhamBorn]

These oil companies also know whats coming with China.Even a mid range energy use expansion should see gas use 10x by 2050,thats ten times.Thats double the present world gas market.Just China.That ignores India who will also see big growth.Oil might flatline in China and likely wind and solar will expand to 30% of electric.Those who think China can simply go to net zero need to know that to do that they need to stop growing and accept Chinese people can consume only 30% of what westerners do.No chance.There is going to be a huge squeeze on LNG starting in a few years,maybe shorter.

Massive profits ahead for companies who can leverage these facts.

Everyone has to decide how to trade their portfolio and holdings,but i will be adding when i can,not selling any in the space.

[jamtomorrow]

39 minutes ago, DurhamBorn said:

The BP release today about the wind bid wins in the Irish Sea is interesting on many levels.First it shows big oil will become some of the biggest renewable players in the world,and the dopey woke brigade have sold out of them all.Second the engineering skills they have transfer very easily.Third the big utility compnanies like pairing up with big oil.It means access to capital,experts in many areas needed and access to mass energy trading.

Big oils job is to keep nuclear down as much as they can because thats their real threat.Mid cycle as cost of capital increases they should have an easy time picking up assets.The Scottish play will surely get bought out at some points,though that nuclear holding is whats stopping it.Unless someone actually fancies funding new nuclear or could pump a bit of capital in and float it off as a seperate entity.

DB, is there any possibility of big oil getting *into* nuclear?

#2 and #3 seem equally applicable, and if anyone has the clout and experience to finally bring engineering and financial sense to nuclear energy, it would be the likes of Shell, BP etc.

[Bricormortis]

It would be good if the govt could re-visit the idea of the Severn Barrage concept for power generation. Any other country would have that done and dusted surely ?

[goldbug9999]

28 minutes ago, harp said:

Bitcoin 😳

Seems like Tesla bought $1.5 billion worth today according to zerohedge  🤔

I dont know which is more of a shock - Tesla buying bitcoin or ZH reporting an actual fact.

[DurhamBorn]

9 minutes ago, jamtomorrow said:

DB, is there any possibility of big oil getting *into* nuclear?

#2 and #3 seem equally applicable, and if anyone has the clout and experience to finally bring engineering and financial sense to nuclear energy, it would be the likes of Shell, BP etc.

Iv thought about that a lot and the answer is i dont know.The Scottish play is an obvious way in,but it would probably take Shell to do it.I also think big oil is trying to keep nuclear off the agenda as much as they can so that would put them off.They want to make good money from renewables,but also provide the baseload through gas.That way they gain both ways.They support the UK going down that road because its a fantastic learning experience for them.

[Yadda yadda yadda]

7 minutes ago, DurhamBorn said:

Iv thought about that a lot and the answer is i dont know.The Scottish play is an obvious way in,but it would probably take Shell to do it.I also think big oil is trying to keep nuclear off the agenda as much as they can so that would put them off.They want to make good money from renewables,but also provide the baseload through gas.That way they gain both ways.They support the UK going down that road because its a fantastic learning experience for them.

You see nuclear as being instead of renewables. Renewables cannot be full time generation. Therefore gas is also needed. Nuclear doesn't start up and switch off quickly like gas can. So increase renewables and you also need to increase gas. Unless batteries or other storage becomes viable on a huge scale. I expect this is unlikely because all the battery metals will be going into car batteries as much as anything else.

Nuclear is therefore a problem for the oil and gas firms.

Does that sum it up?

[Transistor Man]

1 hour ago, jamtomorrow said:

DB, is there any possibility of big oil getting *into* nuclear?

#2 and #3 seem equally applicable, and if anyone has the clout and experience to finally bring engineering and financial sense to nuclear energy, it would be the likes of Shell, BP etc.

I can’t see it.

Several oil and gas service companies have already tried getting into nuclear. 

My belief is the state is better off doing nuclear directly. Like the CEGB used to. Contract a consortium to build them: civil contractor + nuclear vendor + boiler maker

What they did for Sizewell B (on budget, 2 months early), do it again. 

(..... years back, Exxon used to manufacture uranium fuel, I believe.) 

 

[jamtomorrow]

21 minutes ago, Transistor Man said:

I can’t see it.

Several oil and gas service companies have already tried getting into nuclear. 

My belief is the state is better off doing nuclear directly. Like the CEGB used to. Contract a consortium to build them: civil contractor + nuclear vendor + boiler maker + Alstom 

What they did for Sizewell B (on budget, 2 months early), do it again. 

(..... years back, Exxon used to manufacture uranium fuel, I believe.) 

 

Yeah, I can see that makes sense for Big Nuke.

What about the marine-scale-to-civil stuff that Rolls got into that consortium for? Might be a better fit for the Shells and Schlumbs of this world?

That way they get to put some toes in the water, experiment, get a feel for the sector - all without having to go Full Hitachi Retard.

[DurhamBorn]

55 minutes ago, Yadda yadda yadda said:

You see nuclear as being instead of renewables. Renewables cannot be full time generation. Therefore gas is also needed. Nuclear doesn't start up and switch off quickly like gas can. So increase renewables and you also need to increase gas. Unless batteries or other storage becomes viable on a huge scale. I expect this is unlikely because all the battery metals will be going into car batteries as much as anything else.

Nuclear is therefore a problem for the oil and gas firms.

Does that sum it up?

Yes,nuclear is the only alternative to gas for baseload on the scale needed (and coal).The UK has fantastic wind etc but still needs decent baseload.Other countries need even more.Hydrogen might provide some baseload later in the cycle as well.

[Bricormortis]

US. treasury long bond above 2%

https://www.msn.com/en-us/money/markets/treasury-long-bond-yield-tops-2-mark-for-first-time-in-a-year/ar-BB1duuQh

 

10 year above 1.2

[Transistor Man]

55 minutes ago, jamtomorrow said:

Yeah, I can see that makes sense for Big Nuke.

What about the marine-scale-to-civil stuff that Rolls got into that consortium for? Might be a better fit for the Shells and Schlumbs of this world?

That way they get to put some toes in the water, experiment, get a feel for the sector - all without having to go Full Hitachi Retard.

I worked on a project 11 years ago which aimed to link up people like Shell with nuclear vendors like Areva. The idea was to explore nuclear cogeneration, with a Gen IV gas cooled reactor supplying heat to industrial processes.

The US was very keen at the time, with their NGNP programme - Chevron and CononcoPhilips were involved. 

One thing I did was to look at technologies for coupling reactor and process. What materials would be required. Working out the performance limits. 

It’s all possible. But, far from easy. Not very practical was my conclusion, at the time. 

I really hope RR get into these “small” modular reactors. It’ll take years to do, though. 

[Don Coglione]

4 minutes ago, Transistor Man said:

I worked on a project 11 years ago which aimed to link up people like Shell with nuclear vendors like Areva. The idea was to explore nuclear cogeneration, with a Gen IV gas cooled reactor supplying heat to industrial processes.

The US was very keen at the time, with their NGNP programme - Chevron and CononcoPhilips were involved. 

One thing I did was to look at technologies for coupling reactor and process. What materials would be required. Working out the performance limits. 

It’s all possible. But, far from easy. Not very practical was my conclusion, at the time. 

I really hope RR get into these “small” modular reactors. It’ll take years to do, though. 

Thank you, Transistor Man, for sharing your knowledge and experience.