Can Tesla Survive?
In this newsletter:
1) Green Energy Transition Flops As Global Demand For Fossil Fuels Keeps Growing
Financial Times, 3 August 2019
2) Can Tesla Survive?
Seeking Alpha, 31 July 2019
3) India’s New Coal Boom
Energy Live News, 5 August 2019
4) How The US Shale Revolution Changed America & The Face Of Geopolitics
John Hulsman, City A.M., 8 July 2019
5) El Paso Terrorism Suspect’s Alleged Manifesto Highlights Eco-Fascism’s Revival
Huffington Post, 4 August 2019
6) Julia Hartley-Brewer: Don’t Panic – The End Isn’t Nigh
Sunday Express, 4 August 2019
Full details:
1) Green Energy Transition Flops As Global Demand For Fossil Fuels Keeps Growing
Financial Times, 3 August 2019
Coal, oil and gas still expected to contribute 85% of primary power supply by 2040
Unprecedented efforts to install renewable power capacity have only translated into meeting 2 per cent of global energy demand, meaning the world’s overwhelming reliance on fossil fuels shows no sign of abating.
A new report forecasts that coal, oil and gas will still contribute about 85 per cent of primary energy supply by 2040, compared with 90 per cent today, jeopardising efforts to contain the worst impacts of climate change.
Energy consultancy Wood Mackenzie said 1 terawatt of installed solar and wind capacity makes up around 8 per cent of total power generation as of 2019. This equates to just a fraction of total energy consumption.
“The world risks relying on fossil fuels for decades to come,” the report said.
It forecasts carbon emissions will continue to rise, with their growth only slowing in the 2030s. This will put the world far off course in meeting the Paris climate goals, to limit global warming to well below 2C, despite growing political momentum to prevent climate change.
Energy demand, led by swelling populations in emerging economies in Asia and Africa, will increase by at least 25 per cent by 2040. Yet carbon emissions would need to halve over the same period to comply with the Paris accord, posing a huge challenge for energy systems.
Full post
2) Can Tesla Survive?
Seeking Alpha, 31 July 2019
It should be quite clear by now that Tesla is structurally unprofitable as an automaker.
It should be no secret by now that Tesla (TSLA) missed both its earnings and revenue estimates pretty badly. If you think the worst is over though, think again. Not only did the shareholder letter paint a disastrous picture of Q2, but the future also looks pretty bleak as well. Tesla remains an extremely dangerous investment even at its current lower price level.
The record quarter
In our last article, we pointed out that despite Tesla’s record deliveries number, it was likely going to report a loss for Q2 due to multiple factors. Well, that turned out to be true, but we were expecting a loss of $100-200mil without credits, not a loss of $370mil with credits. The massive loss caught us by surprise and makes us further question the sustainability of Tesla’s business model.
The loss itself isn’t very impressive. Tesla has reported far larger quarterly losses multiple times, including in Q1 2019. The impressive part is that Tesla managed to report this loss in a quarter in which it delivered record amounts of cars. Number of cars delivered in Q2 even beat Q3 and Q4 of 2018, in which Tesla delivered its first two consecutive quarters of profits.
If you exclude regulatory credits, the loss deepens to nearly $500mil. Its honestly quite hard to think of other companies that can have losses of this magnitude after reporting record revenues.
It should be quite clear by now that Tesla is structurally unprofitable as an automaker. They can’t make sustainable profits on high-margin cars, the Model S and X, and they can’t make sustainable profits on low-margin cars, the Model 3, even with record volumes.
Full post
3) India’s New Coal Boom
Energy Live News, 5 August 2019
India expects coal-fired power capacity to grow by 22% in three years.
That’s according to the Chief Engineer at the country’s Federal Power Ministry, Ghanshyam Prasad, who Reuters reported as stating coal capacity is likely to reach 238GW by 2022.
India’s Coal Minister, Pralhad Joshi previously said annual coal demand rose by 9.1% during the year ending March 2019, noting the figure hit 991.35 million tonnes, driven primarily by utilities, which accounted for three-quarters of total demand.
The anticipated growth is likely to affect efforts to cut emissions and could risk worsening already poor air quality.
India’s electricity demand rose by 36% in the seven years up to April 2019, while coal-fired generation capacity during the period rose by three-quarters to 194.44GW.
Pralhad Joshi said despite the growth rate in thermal capacity outpacing electricity consumption in the last few years, more coal-fired plants will still be needed in the future to meet growth.
He added: “If we have to meet demand and address the intermittencies we have with solar and wind, we have no choice but to keep depending on coal-based generation in the near future.”
Full story
4) How The US Shale Revolution Changed America & The Face Of Geopolitics
John Hulsman, City A.M., 8 July 2019
The shale revolution is a major reason for America’s basic strategic realignment away from the Middle East and towards Eurasia in our new multipolar era.
In theory, we all know that major technical revolutions change and fundamentally disrupt the face of the world we live in.
In practice, analysts of all stripes are too often glacially slow to realise this process when it is at work, let alone what it means.
These events (such as the advent of the mass-produced automobile and the personal computer) transcend their technical importance, having profound social, economic and even geopolitical ramifications – consequences that are far too often seen decades after they have actually come to pass.
The shale revolution is the latest case in point.
One of my proudest analytical moments came during my glorious first stint with City A.M., when we, from very early on, not only saw that the shale revolution was real, but that it was bound to overturn both the global energy market, and, equally importantly, the world of geopolitics.
There is nothing that has come to pass in the years since this claim was boldly stated in this newspaper that leads me to change our initial (then unheard-of) assessment.
Hydraulic fracturing, commonly called “fracking” – the process of injecting liquids at high pressure into subterranean rocks, widening existing fissures, and far more plentifully extracting oil and natural gas – has been such a technical game-changer.
It has transformed the US, by far its leading exponent, from a long-term energy mendicant into the largest producer of oil in the world, in the blink of an historical eye.
By contrast, hapless Europe has been loath to follow the American example, as environmental fears have overcome its desperate need for new energy sources. It remains the energy beggar that the US was just years ago.
US energy production has increased an eye-opening 140 per cent since the shale revolution took flight in 2008. In 2018, US crude oil production rose by a stratospheric 30 per cent, with natural gas production also up fully 12 per cent. American oil production reached an all-time high of 10.9m barrels per day last year.
These startling numbers simply don’t lie; the shale revolution is alive and well and here to stay.
Saudi Arabia, alarmed by the ramifications of the shale revolution, has tried to contain America’s disruptive presence on the global energy market scene.
First, the Saudis attempted a variation on what I call the “Rockefeller strategy”, following in the footsteps of America’s nineteenth-century energy titan in driving prices down by over-producing (at a loss) to try to force new competitors into bankruptcy and out of the market.
But the Saudi gambit backfired spectacularly, amounting to a serious self-inflicted wound in a country that needs oil prices to be around $80 a barrel to balance its bloated budget.
Shale production has proved to be far more price sensitive than old, fixed-rig dominated Saudi and Russian energy production. It can be turned on and off at a fraction of the fixed-rig price like a water faucet, depending on the global energy price. Fracking rigs shut down when the Saudis over-produced, only to restart as the price inevitably edged upwards.
Going in the opposite direction has not worked very well, either. Present Opec and Russian production cuts, while leading to a global energy price increase, have bequeathed to the Americans greater market share.
In ramping up production, the US has kept a ceiling on global oil prices. It is not too much to say that the shale revolution has left the US, and not Opec or Russia, with the potential to become the global energy swing producer – a change of gargantuan proportions.
The geopolitical ramifications of the shale revolution are as profound as they are ignored. Shale means that the US must focus far more of its attention on its own backyard. For if Mexico, Canada, and the US work in unison (as the new USMCA trade pact makes possible), the dream of North American energy independence is possible.
Gone should be the days of over-worrying about the Middle East (except as an offshore balancer), a major strategic windfall for an America determined to turn its attention to Asia, where much of the political risk and reward will be in the new era.
There, great power rival China finds itself far more dependent on energy production outside its borders, a very real handicap in the emerging superpower competition with the US.
Full post
5) El Paso Terrorism Suspect’s Alleged Manifesto Highlights Eco-Fascism’s Revival
Huffington Post, 4 August 2019
The racist rant inveighs against environmental destruction and calls for mass killings to make the American “way of life” more “sustainable.” It’s not unique.
A manifesto posted online shortly before Saturday’s massacre at a Walmart in El Paso that the suspected shooter may have written blamed immigrants for hastening the environmental destruction of the United States and proposed genocide as a pathway to ecological sustainability.
Filled with white nationalist diatribes against “race-mixing” and the “Hispanic invasion of Texas,” the manifesto highlights far-right extremists’ budding revival of eco-fascism.
Titled “The Inconvenient Truth,” an allusion to Al Gore’s landmark climate change documentary, the ranting four-page document appeared on the extremist forum 8chan shortly before the shooting. Authorities have yet to confirm whether Patrick Crusius, the 21-year-old Dallas-area white man arrested in connection with the shooting that left at least 20 dead, is the author.
“The environment is getting worse by the year,” the manifesto reads. “Most of y’all are just too stubborn to change your lifestyle. So the next logical step is to decrease the number of people in America using resources. If we can get rid of enough people, then our way of life can become more sustainable.”
HuffPost reviewed the document but, with consideration to the ethical concernsof broadcasting what might be a notoriety-seeking killer’s messaging, is not publishing a link to it.
The manifesto explicitly cites the 74-page message posted online by the gunman charged with killing 51 worshippers at two mosques in Christchurch, New Zealand, in March. That alleged shooter, Brenton Tarrant, a 28-year-old white Australian, thrice described himself as an “eco-fascist” motivated to repel waves of migrants fleeing climate change-ravaged regions of the world.
Full story
6) Julia Hartley-Brewer: Don’t Panic – The End Isn’t Nigh
Sunday Express, 4 August 2019
REMEMBER those men who used to wander the streets with placards proclaiming “The End Is Nigh” in big black letters, shouting about how the world is about to be destroyed and how we’ll all go to Hell?
We used to pass by, laugh at the lunacy of the doomsayers, shrug and carry on happily with our own lives. Today, though, the people predicting the end of the world aren’t standing on street corners shouting into the wind, they’re on our TV screens, leading political parties and are even members of the Royal Family. The doomsday cultists have gone mainstream and now anyone who’s anyone is busy predicting the impending green apocalypse.
Prince Harry is just the latest high-profile figure to insist that we must do more to protect our planet or face its imminent destruction.
He confessed last week in an interview in Vogue magazine – guest-edited by his wife Meghan – that the couple plan to have only two children in a bid to save the environment.
It’s a bit rich for a couple who routinely travel by private jet, own a huge house which cost £2.4million of taxpayers’ money to do up and whose wedding cost £32million, to be waxing lyrical about cutting their carbon footprint.
But it isn’t the hypocrisy of these painfully “woke” royals and their celebrity chums that worries me; it’s the fact that so many of them seem to believe the nonsense they spout.
It’s one thing to worry about a changing climate and pollution, to want to do away with single-use plastic bottles and bags, end dumping of waste in our oceans and to move away from fossil fuels to more sustainable forms of energy.
It’s quite another to sign up to the hysterical misery of the eco-lunatics such as Extinction Rebellion who insist that we have only a few years to save our planet from destruction.
If the doomsday cultists are to be believed, every time we take a holiday flight or get in our cars or eat a hamburger, we are killing our planet.
And the birth of a baby dwarfs all of those terrible deeds when it comes to their carbon footprint. Simply by existing, every child is bringing the end of human existence a little bit closer.
What must it be like to wake each morning and think the end is nigh?
How terrifying must it be to spend all day worrying that the human race faces extinction? How miserable must it be to believe that it’s wrong to bring a new life into the world because of an uncertain future on a dying planet?
Frankly, I’m amazed that people like Meghan and Harry can find the where with all to even get up in the morning.
It must be utterly grim to have such a pessimistic view of the world, your future and of your fellow human beings.
More importantly however, it is a viewpoint that is also staggeringly at odds with the facts. The world is not about to end – climate change or no climate change. And the Earth’s population is not about to overburden our planet. […]
And YET Prince Harry and Meghan have joined the ranks of the doomsday cultists along with 16-year-old Swedish schoolgirl Greta Thunberg, new global head of the green religion.
This little girl in pigtails is feted as the eco-oracle, with politicians, journalists, celebrities – yes, and royals – hanging on her every word as she predicts catastrophe if we don’t listen to her call to arms.
This is a terrible state of affairs when even the most privileged among us are signed up to the doom and gloom of the eco-cultists, despite all evidence to the contrary.
Truth is, there has never been a better time to be alive, whether you live in a palace or a mud hut.
Our planet will still be here, merrily turning, providing a home to billions, long after Meghan and Harry’s great-great-great-great-grandchildren have been born and this ridiculous doomsday cult has been consigned to the history books.
As we might once have said to the man with his “The End Is Nigh” placard: “Cheer up, mate, it might never happen!”
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The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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