TECK COMINCO CL B (TCK)
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- Investing in Molybdenum [view article]
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- Fort Hills Project - Another Debacle for Teck Cominco [view article]
- Mining Sector Ripe for Consolidation Following Recent Corrections [view article]
- David Coffin on Metals: 'Pick Away' at Bargains [view article]
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- Three Mining Stocks That Stand To Gain from Loonie's Decline [view article]
- Gold and Silver Turn Bearish: No Conspiracy Here [view article]
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- John Tumazos: Benefiting From the Duluth Complex [view article]
- TD Newcrest: Teck Cominco Is Undervalued [view article]
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- BMO Analyst: No Faith In Teck Cominco
- Update: Emerging Metal Producers
- Copper Stocks Take a Hammering
- Analysts Lower Price Targets for Teck Cominco
- An Impressive Run for Fording
- Fort Hills Project - Another Debacle for Teck Cominco
- Mining Sector Ripe for Consolidation Following Recent Corrections
- David Coffin on Metals: 'Pick Away' at Bargains
- Inmet Mining Finalizes Petaquilla Copper Takeover
- Mining Stocks: Value Shopping Opportunities
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Investing in Molybdenum [view article]
would you please send me the molybdenum plant equipment list with a brief description ReplyAltendorf
Copper Stocks Take a Hammering [view article]
IVN down 18, AAPL down 18% - eh, so what? Infrastructure projects (wind farms, gas turbines, nuke plants) need copper, not gadgets. ReplyCopper Stocks Take a Hammering [view article]
At least the thieves will stop stripping the repo houses of plumbing pipes....after all,we're going to own them soon... Replythinking
Fort Hills Project - Another Debacle for Teck Cominco [view article]
I have two additions on the comments by zrjh26. The first is that windmills produce electricity. To convert the BOPD to electricity (a very useful product for most things except transportation) you need to run the oil through a powerplant which has an overall efficiency of 25 to 30%. This reduces the effective price of the oil equivalent from $475/barrel to perhaps $125-150/barrel.The part of the windmill argument that got left out is that substantial investments in transmission lines are needed to get from the windmills to where the energy is consumed. I can't tell whether the $500k/site includes this cost or not, although it sounds like it got included at that kind of figure.
I also agree with Steve Ward in the comments are more interesting than the article. Reply
Fort Hills Project - Another Debacle for Teck Cominco [view article]
Better get out oil for transportation is doomed ReplyFort Hills Project - Another Debacle for Teck Cominco [view article]
Better get out oil for transportation is doomed ReplyFort Hills Project - Another Debacle for Teck Cominco [view article]
Our government is so out of touch as to what needs to be done that either candidate gor president leaves us wanting.On one side are the enviro jihadists, on the other the crony capatalists. Nothing will get done quickly or correctly. Yes, a good comment and should be an article. But what does it have to do with Teck sucking eggs on an oil sands project? Reply
Fort Hills Project - Another Debacle for Teck Cominco [view article]
Perhaps this shouldn't be a "comment" on an article...but an actual published article!! This is good stuff! John Walker has been warning folks for a long time about the MLP craze. MLP's have their place and when properly pulled together and structured, are good vehicles. But this isn't a one-size-fits-all solution. Or put another way, when the only tool you have is a hammer, everything looks like a nail!Drill here, drill there, drill now, drill tomorrow!! And nuke it, blow it, recycle it, battery control it...it all needs to be done!!! And, while we are at it, why not start using CNG for cars/trucks and converting some of our vast coal resources into liquids using CTL technology. Again, no silver bullet but an all-encompassing multi-pronged approach in the short term with a longer term view/solution in mind as well! Reply
Fort Hills Project - Another Debacle for Teck Cominco [view article]
ANWR's 4 billion, perhaps mythical, barrels shouldn't be drilled because it represents less than a year of gross domestic oil consumption.How many times have you heard that? It is a famous example of statistical misdirection applied by the Haters... of us lovable puppy dog-like oil and gas folk. Using similar logic, perhaps we shouldn't plant any crops this year because it only represents a years worth of food. Let them eat... Yellow Cake.
In any case, I want to share some real stats with you... the kind that are a little harder to "misdirect".
Fun Fact 1) Gasoline contains 116,000 BTU's/gal, and takes around 22,000 BTU's/gal to find, drill, transport, and refine. NET POSITIVE BTU? 94,000 BTU's or a little bit short of 5:1 leverage, or, put another way Return on BTU Investment.
Corn based ethanol contains 76,000 BTU's/gal, and takes 98,000 BTU's/gal to plant, grow, harvest, and refine. NET POSITIVE BTU? Uhhh. None. -22,000 actually. Less than payback. Kinda like saying "we lose money on every deal but we make it up in volume". I implored the oil and gas lobbying organizations to NOT attack ethanol subsidies by pointing out this physical limitation to lawmakers, because farmers get knee jerk defensive when you try to rip their snouts away from their Pork Trough.. and hell, the negative BTUs are gonna come from hydrocarbons anyway, heh heh.
To be fair, I think human ingenuity in the processing realm will eventually make corn-based ethanol a BTU break even or slightly positive energy contributor across the board given time. But chemistry dictates that it will never be as good as oil... and not even Congress can change chemistry, although I am certain they think they can.
The REALLY sad fact is that corn-based ethanol approaches the same efficiency of some of the drilling deals I have been involved with lately... and nearly all the master limited partmerships (MLP's) I see right now! I wonder what Enervest's John Walker would say about that? He stood up last week in front of hundreds of I-bankers in Dallas and slammed the current MLP craze. A brave man, Walker. a real Texas Ranger.
So, Fun Fact #2) Getting back to ANWR, I thought it might be fun to calculate how many windmills would be needed to make up ANWR. Probably not the kinda fun YOU have, but it suffices for my puny existence.
Seeing that efficiency is the key to all of this, I propose we model the most efficient windmills... large, 2500 KW wind turbines. These bad boys are 3-pronged and have a windmill diameter nearly 250' long. At a nice, optimal 10 MPH average windspeed, these puppies produce around 1 GWh per year... the energy equivalent of a little over 600 BO per year. Giving it the benefit of the doubt, lets round up to 2 BOPD. A straight line 2 BOPD with no decline but a physical equipment life of 20-30 years.
Cap cost per one of these turbines is around $2.5 million, installation north of another $500,000, and the operating cost around 1.5% cap cost per year, or $3,000 per month. I have no idea what the bonus or royalty is, because these are contracts with landowners, not leases, and are not recorded and I have heard they contain very onerous non-disclosure clauses.
OK, us oil and gas guys and anyone else that has the remotest understanding of Net Present Value are already feeling queasy with these numbers because, at, say $75 per barrel, our $150 per day, or $4,500 per month revenue not including royalties is looking pretty mind numbingly bad... $1,500 per month to cover a $3,000,000 capex and site prep investment. That is a 2000 month (167 year) payout for an operation that has an equipment life of 360 months. In other words, the basic proposition is SPECTACULARLY uneconomic. Maybe those MLP's aren't looking so bad after all...
So why would anyone do this kinda deal? Some weird California "sub-prime" wind farm mortgage financing available? No... they do it the old fashioned, big corporation way... they get the government to take away our hard earned dollars by force and give it to them. Corporate welfare... Except that when applied to Green technologies, it somehow become magically transformed into Not Corporate Welfare, although Not Corporate Welfare looks, smells, and behaves exactly like Corporate Welfare.
In order to make this a Break Even proposition, it needs to have Not Corporate Welfare of $8 dollars for every dollar's worth of energy generated at market value. For a rational return of say, 2 points over T-Bills, or 7% IRR, from this, a whole lotta Not Corporate Welfare has to happen. Like nearly $20 dollars for every dollar's worth of energy generated at market value. By turning it around and trying to figure out what cap and site cost would make this economic dictates that a $350,000 cap and site investment would yield non-subsidized break even, and $195,000 would yield a 7% rate of return. This is a LONG way from the $2.5 million GE is getting paid to build energy plants at 20 times market rates.
Let's get back to ANWR. For these magic value destroying beasts, with their 250' wingspan, the most efficient spacing is 1500', or, for the sake of simplicity, 160 acre spacing. 4 windmills per section. 8 BOPD per section. Granted, it doesn't have a decline curve, but...
In order to make up for ANWR's 200 days of production, spread out over 20 years, (the minimum lifespan for the windmill equipment) we need to produce 500,000 BO/D equivalent from wind. So we just need 125,000 sections of windy land to make up for the 1 or 2 sections they propose using in ANWR. The 125,000 sections will contain 500,000 windmills with a cap and fab cost of 1.5 trillion dollars and an annual operating cost of nearly 20 billion dollars. To put this area into perspective, it is a little less than 50% of the area of Texas, twice the area of New Mexico, or the combined area of New York, West Virginia, Maryland, Massachusetts, Vermont, New Hampshire, New Jersey, Connecticut, Delaware, and Rhode Island.... OK, forget Jersey.
1.9 trillion dollars for 4 billion barrels. That is an all in cost of $475 per barrel of oil that we chose NOT to produce in ANWR, and the trade of the East Coast in exchange for 1 sq mile of never-endangered mosquito habitat. Hmmmm. Maybe not a bad trade. Perhaps I need to rethink this.
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Mining Sector Ripe for Consolidation Following Recent Corrections [view article]
Why not Seabridge gold? ReplyMining Sector Ripe for Consolidation Following Recent Corrections [view article]
WHAT HAPPENED TO SEABRIDGE GOLD??? ReplyDavid Coffin on Metals: 'Pick Away' at Bargains [view article]
FYI, some of us know to shun advice from anyone touting under the pink sheets. ReplyDavid Coffin on Metals: 'Pick Away' at Bargains [view article]
TGB, low multiple, excellent prospects, production in the process of doubling.Copper inventories have increased dramatically at the LME in the last 6 months. Watch for declines to signal a turn. Reply
Courtenay
David Coffin on Metals: 'Pick Away' at Bargains [view article]
Very useful and interesting article. Many thanks. By the way, it seems hard to imagine a better investment than FCX below $70. Talk about a decent entry level! ReplyDavid Coffin on Metals: 'Pick Away' at Bargains [view article]
thanks David, what do you think of FCX at this level? is it worth starting to buy it if you don t own it or any gold for that matter? Reply