I was Wrong…

I was wrong about oil & gas innovation:

I will come out cleanly and admit it: I was wrong.  I remember two or three years ago I was writing about how high gas prices are the new norm.  While this may be the general trend over a VERY long time span, I believe the level of ingenuity and innovation in the oil sector recently is astounding.  In response to a global supply glut, shale oil drillers have responded accordingly by tightening their operations.  What we thought of as an industry that required 90 or 100 dollar/barrel prices to survive, is now learning how to be profitable at 50 to 60 dollars/barrel.  A mixture of both newer generation rigs and maximizing efficiency on many different fronts has allowed this industry to stay afloat in an era of excess global supply.  The shale oil drillers in America have made their message clear that they plan to compete with the low-cost Saudis and Kuwaitis.

Please read an article here for further information:

https://next.ft.com/content/f363e688-dbe4-11e5-9ba8-3abc1e7247e4

Am I still right about the renewable energy movement?

My optimism about renewable energy has been muffled in recent years because I believe that sustained, profitable growth for these companies will be very difficult.  However, do I want to throw myself into the same boat as oil & gas?  For being part of the so-called “energy revolution,” renewable sources are *mostly* shamelessly unprofitable and dependent on non-renewable grid structures and sustenance.  Many solar companies are growing, but not profiting.  Now, the one exception that I know of is First Solar, a company that has posted solid profits over the last three years and has continued to drive lower cost structure through polycrystalline solar panel production.  Polycrystalline cells are inferior to monocrystalline cells, but have lower production costs.  Despite that, First Solar is an outlier in the industry.

Regardless of what happens to both sectors, I honestly need to stay humble about the level of innovation that has revolutionized these industries.

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