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Michael Fitzsimmons

 
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  • Charlie Munger: Energy Independence Is Dumb [View article]
    Well, you seem to think foreign oil is low priced, so I guess we can agree to disagree. What IS low priced is US natural gas - and not using it to replace foreign oil in the transportation sector is the biggest policy error the US has ever made....and is still making.
    Jul 27, 2013. 09:58 AM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Davephd: that is exactly what the opponents of the interstate hwy system said. Yet it was built and has paid dividends to all Americans for decade. So perhaps you are over-looking the quick payback and the dividends of such an infrastructure, that could last 100 years+. Imagine the payback in reducing foreign oil imports by 5 million barrels a day - that's close to $2 billion/year. And that is money that would go as royalties to American farmers and leaseholders and US energy companies. The multiplier effect would be huge. The dollar would stop declining, and food inflation caused by the ridiculous ethanol mandates would slow. And oh, btw, our air and water would be cleaner. So it is not the cost of doing it that is so high, it is the cost (and danger) of NOT doing it.
    Jul 27, 2013. 09:56 AM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    well said.
    Jul 27, 2013. 09:52 AM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    we need some high density storage sites for all that radioactive waste as well.....
    Jul 27, 2013. 09:50 AM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Check out Dresser-Rands' Compressed Air Energy Storage technology ("CAES"):

    http://bit.ly/14SCHga

    A great way to store solar and wind energy for use when needed.
    Jul 26, 2013. 08:08 PM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    SkipK: does "capitalism and free markets" automatically assume unbounded issuing of money and T-bonds and T-bills? Seems to me that is pretty artificial in its own right....
    Jul 26, 2013. 08:05 PM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Mohamed: I never said "the value of The Dollar is derived from pricing oil". And I certainly never said if oil isn't traded in US dollars the USD will cease to have value. So let's try to debate what is actually being written - ok?

    Now, the dollar is being valued as it is for a number of reasons:

    1) it is currently world's default reserve currency
    2) it has been issued in such huge amounts that it, and only it, can supply the liquidity and magnitude needed to satisfy the countries of the world foreign reserves requirements for trade
    3) there is no other currency in the world that is traded like the dollar is, in as many countries, and is universally accepted by default.
    4) the lack of a competitor currency.

    But the leaders of Brazil, Russia, China, and India have all openly spoken about the need for an alternative to the USD. If history is any indication of the future, they will be successful in this endeavor, and poor US fiscal, monetary, energy and foreign policies will make it easier for them to succeed.
    Jul 26, 2013. 08:03 PM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    World reserves currencies, historically, are based first on the strongest country militarily. Then the country over-reaches (just as the US has...) but the reserve currency continues on momentum until a new power comes along and pushes the old currency out. It happens fast (ask England). Russia and China should not be underestimated. They have much better balance of payments than the US and are working together on currency issues because they both have a common concern: the US dollar. But China will take its time and look out for the long term. Currently, they would be as badly hurt by a change in the dollar's status due to their huge pile of US dollar denominated foreign reserves. But, they are working on that and have said as much in public. Also, they are slowly, quietly and quite impressively working on establishing the Yuan as a world currency and have established its trading recently in London. The Yuan has also appreciated substantially against the US buck over the past couple years.
    Jul 26, 2013. 07:55 PM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Yeah, and it has been...I could make a list of all the bad policies the US has made based on "national security". Bad for the world, bad for its citizens, and certainly bad for the US budget. We had better get a handle on it soon or Presidents Ike's warning about the military industrial complex will come true...hell, it already has.
    Jul 26, 2013. 07:50 PM | 2 Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Ahh, ok - I see Watermellon. You may be correct on that over the next 15-30 years or so. SU says oils sands is about $35 buck, and Bakken is probably around $80 and somewhat dropping due to increased technology. Bakken is substantially less than $80 and many in the Permian are too. However, 300 years - no way. These shale formations are not going to last forever, or even probably for 50 years. Companies are drilling the hell out of all of them now, and depletion rates are very very fast.

    And, as we know, oil is a world commodity. Lifting costs in Brazil, GoM, Norway, North Sea, and Arctic zones is just going to grow with prices of turbines, steel pipe, wages, and environmental safety requirements. Oil is going higher...any war in the ME like Bush's adventure in Iraq, they will go much higher, and very quickly.
    Jul 26, 2013. 07:47 PM | Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Obama (like all his predecessors) is completely ignoring the only domestic fuel source that can be scaled up to significantly reduce foreign oil imports: natural gas. Natural gas transportation is the solution to the economic, environmental, and national security problems the US faces after decades of reliance on foreign oil. But we better get started...soon.
    Jul 26, 2013. 07:43 PM | 3 Likes Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Jason: "many trillions" is simply untrue. For all the money wasted on battery research and battery and EV manufacturing, the US could already have, today, a coast-to-coast and border-to-border nat gas refueling infrastructure on the interstate highway system. And this is exactly what the EU, China, and Russia are all doing in their latest strategic energy policies - and they are paying 3-4x what the US does for natural gas! Plus, the payback on nat gas transportation is very short - not only don't we have to print money to buy foreign oil, but nat gas is cheaper and the money goes toward royalty payments to farmers, landowners, and US energy companies. The multiplication factor of saving 5 million barrels of foreign oil a day are simply huge. Nat gas transportation could usher in an era of economic and environmental prosperity few can even imagine today.
    Jul 26, 2013. 07:42 PM | 1 Like Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Biofuels are a failed concept, and ethanol and all the rest I think prove this statement. What they are (just like EVs) is a distraction, which big oil and Congress supports, to effectively keep the status quo (gasoline and diesel) intact. Biofuels (and EVs) help keep the US addicted to expensive, scarce, and dirty liquid fuels when what we should be doing is transitioning to cleaner, cheaper, and much more abundant gaseous fuels - in the short and medium term this means natural gas transportation. In the long term, it means hydrogen. A smart energy policy would be to build a natural gas refueling infrastructure in which much of that infrastructure could be reused for a hydrogen based economy. Biofuels are simply keeping us stuck in the 20th century when we need 21st century (i.e. the cleaner, gaseous century) thinking.
    Jul 26, 2013. 07:38 PM | 1 Like Like |Link to Comment
  • Charlie Munger: Energy Independence Is Dumb [View article]
    Jack - technically you may be correct, but please realize that social programs are (or at leased used to be...and should be) funded by tax receipts. Social security gets taken out of your paycheck. Federal and state taxes are used to take care of people unable (or in many cases today, unwilling...) to take care of themselves. Printing money to pay for oil is a decision actively taken by the Federal government, which knows full well the consequences. They also know full well the solution (natural gas transportation)...but Congress has been compromised by rich and powerful lobbyists who want to keep the status quo in tact. So, here we sit stuck on gasoline and diesel while the EU, Russia, and China implement strategic natural gas transportation based energy policies.
    Jul 26, 2013. 07:34 PM | 1 Like Like |Link to Comment
  • A Science Lesson For Charlie Munger [View article]
    Nice article Tristan and I appreciate the reference and link to my article. I also liked the Economist article you linked to.

    As for biofuels, I think they are a failed attempt to stay addicted to expensive liquid fuels when we should be transitioning to cheaper, more abundant, and cleaner gaseous fuels. You mentioned CH4, which is methane or more commonly called natural gas. Robert Hefner III, in his great book The Grand Energy Transition, make a very logical argument that natural gas has non-organic origins (i.e. big-bang or whatever you want to call that). He says that it is likely the most common molecule in the universe, and as evidence for his creation theory is the fact that CH4 has been found in granite - slim chance it had an "organic" source when found there. And this is why natural gas is so abundant on Earth. You *always* find natural gas when you find coal or oil, but the opposite is not true.

    So, we have natural gas in abundance all over the Earth, and it is relatively inexpensive (compared to oil) all over the planet, and very cheap in the US, and very clean compared to coal and oil. We also have the ability to fuel cars and trucks with natural gas - it's a 100 year old technology, proven, and reliable. So, instead of over complicating the problem, all we need to do is build out a natural gas refueling infrastructure and start making and using NGVs. And this is what the energy policymakers in the EU, China, and Russia have mapped out for those countries. Here in the US, we get distracted by "policymakers" whose end goal is to keep the status quo intact: gasoline & diesel. EVs? Where are they and who can afford them and if they are recharged by coal, are they really "0 emssions" as Elon Musk said? Obviously not. So a great near and mid-term solution is obvious, available, affordable, economical, and environmentally critical:

    Natural Gas Transportation.

    Thanks for your article, information, and points of view. I enjoyed it.
    Jul 26, 2013. 07:28 PM | 12 Likes Like |Link to Comment
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