Start Trading CFDs Over 2,200 Different InstrumentsStart Trading CFDs Over 2,200 Different Instruments2 days5 daysLeonard S. Hyman is an economist and financial analyst specializing in the energy sector. He headed utility equity research at a major brokerage house and…
While it is understandable why these groups want to defend their industries, this reluctance to change might undermine legacy companies going forward.Maybe we have been watching too many westerns, but we get the feeling that the fossil fuel industry lobbyists are psychologically somewhere between circling the wagons and preparing for a last stand.
Then, in the same month, the International Energy Agency predicted that consumption of fossil fuels would peak within a decade. Again, what’s the big deal? If total energy demand rises maybe 1-2% per year, and if renewables grow 10-20% per year, at some point the fossil fuel component of energy will have to peak. We are not even considering the wild cards, the renewable gas and hydrogen facilities springing up, and the possibility that we can extract hydrogen from natural deposits underground.
As for electricity suppliers, we worry about this painfully incremental approach to what is still basically a technology business. Why? Because competitors won’t always wait patiently until the electric companies have recovered all their old investments. It’s called creative destruction and in economic terms is seldom pretty.
The moral of the story: ignore the press releases, do the numbers, and don’t watch too many westerns.
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