Tuesday, September 27, 2016

Money Show 2016 - Mark Mills

I when to the Money Show again this year. It was interesting as always and there were some good speakers. Mark Mills was part of the lineup for the Opening Ceremonies. His talk was called "The Future of Transportation: Antidote to Tesla Derangement Syndrome". He is founder and CEO of Digital Power Group.

He says he is not over investing in Oil. Now is the 10th anniversary of the peak oil idea. The alternatives to oil really did not make much money. Now we have peak demand. Why do we have peak demand? It is because oil is a global commodity. In 1973 oil went up some 400%. It had a huge impact.

Since then one third of the world trade uses oil. Shipping miles are up 300%, road miles are up 300% and air miles are up 700%. Transportation oil now uses 70% of the oil used. Oil is not just as important, but it is more important.

The world is changing, but it is always changing. Uber replaces lots of cars. Uber lowers the cost of access to cars. Therefore more cars are wanted. Uber will increase the demand for transportation. It will not lower the demand for cars.

Self-driving cars tech will get solved. It is when, not if it will happen. This will also increase the access to cars and therefore increases the demand for cars. The old and infirm can now use cars.

Tesla and electronic cars will supplement oil cars, but not replace them. Yes, Wind turbines are producing energy. But oil produces the same amount of energy every minute that a turbine produces every hour. If you have a battery with the same amount of energy as a barrel of oil, the battery will weigh 20,000 pounds compare to 300 pounds for the oil. Electric cars are not going replace oil cars.

The problem with corn fuel replacing oil is that we use 40% of the corn grown to make corn fuel. However, this just replaces 4% of the fuel requirements. So corn fuel is not going to replace oil. The only way that corn and electric cars can be winners is because of subsidies. Take away the subsidies and they are at an extreme disadvantage. Gas has a 60 to 1 advantage over batteries for energy. Electrified transportation cannot be pushed to more than 10%.

I have heard these arguments before. None of this has stopped governments from throwing millions upon millions of dollars at green fuel and pushing for electric cars.

On my other blog I wrote yesterday about Canadian Utilities Ltd. (TSX-CU, OTC-CDUAF)... learn more. Tomorrow, I will write about Canyon Services Group (TSX-FRC, OTC-CYSVF)... learn more on Wednesday, September 28, 2016 around 10 am.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter.

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