Energy is Life
December 8, 2022
The origins of energy can be traced back to the very beginning of time, to the moment of the big bang, when the universe was born. In the aftermath of the big bang, the universe was filled with hot, dense matter and radiation.
Over time, this matter and radiation cooled and expanded, giving rise to the stars and galaxies that we see today. The stars are the cosmic factories that produce energy, fusing hydrogen and helium to create heavier elements and releasing vast amounts of light and heat in the process.
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It is this energy that has powered the evolution of the universe, from the birth of the first stars to the formation of complex galaxies and the emergence of life on Earth. Energy is the fundamental building block of the universe.
It drives the processes that shape the cosmos, from the birth and death of stars to the formation of planets and the evolution of life. Without energy, the universe as we know it could not exist.
Energy is also a fundamental component of modern society. Understanding energy systems can be difficult. Many of us simply flip on a light switch and expect the lights to come on, without a fundamental understanding of the complexity of the systems delivering us power.
Energy drives economic growth and development, enabling the production of goods and services, the operation of modern technologies, and the transportation of people and goods. Without energy, most of the systems and processes that underpin our daily lives would grind to a halt.
The importance of energy in driving economic growth cannot be overstated. In today's global economy, access to reliable and affordable energy is essential for businesses to operate, for people to earn a living, and for economies to grow and prosper.
Simply put, energy is fundamental, and its role in enabling prosperity cannot be overlooked.
Gaining a better understanding of energy is excellent way to gain a better understanding of the many other complex systems in our daily lives.
The Relationship Between Energy and Poverty
Access to reliable and affordable energy is essential for reducing poverty and promoting prosperity. In developing countries, lack of access to energy can limit economic opportunities and exacerbate existing inequalities.
Poverty is a complex and multifaceted issue, and access to energy is only one piece of the puzzle. However, it is an important piece, as energy is necessary for many of the systems and processes that underpin economic growth and development.
Without energy, many businesses would be unable to produce goods and services, and would be unable to create jobs and generate income.
In addition to its direct economic benefits, access to energy can also improve people's quality of life in other ways. For example, electricity can provide lighting, heating, and cooling, as well as access to information and communication technologies.
Access to electricity can be a matter of life and death, as it is essential for operating medical equipment and providing essential services, such as water purification and waste disposal.
In developing countries, lack of access to energy can limit economic opportunities and exacerbate existing inequalities. In some cases, it can even trap people in poverty, as lack of access to energy can limit access to education, healthcare, and other essential services.
The Role of Fossil Fuels in Promoting Global Prosperity
Fossil fuel sources, such as oil and natural gas, can play a key role in providing reliable and affordable energy to people around the world. In addition to providing economic benefits, natural gas has been a primary driver of reducing greenhouse gas emissions by displacing coal.
Fossil fuels, such as oil and natural gas, are an important source of energy for many countries around the world. They are relatively easy to extract and transport, and they are a relatively cheap and reliable source of energy.
The use of fossil fuels has helped to drive economic growth and development. The proliferation of fossil fuels has facilitated the growth of industries such as transportation, manufacturing, and electricity generation.
Energy is a critical driver of global prosperity, and access to clean, reliable, and affordable energy is essential for reducing poverty and promoting economic development around the world.
The Future of Energy
The topic of energy shouldn’t be a political one, but given the concerns around CO2 emissions, and their impact on climate, energy is front and center on the political and policy debate stage.
How the future of energy unfolds is of critical importance to the human race. A better understanding of energy by policy makers will help to ensure we don’t destroy our existing energy systems before we can build new ones.
When it comes to choosing an energy source, one of the most important factors to consider is the energy density of the fuel. Energy density refers to the amount of energy that can be stored in a given volume or weight of a fuel. In general, fuels with high energy density are more convenient to use and transport than fuels with low energy density.
For example, gasoline has a high energy density, which is why it is widely used as a fuel for cars and trucks. By contrast, hydrogen has a low energy density, which makes it less practical for use in vehicles.
Nuclear energy also has a high energy density, and it is a clean and reliable source of energy. However, it also has safety and waste disposal concerns that need to be carefully managed. Even with these concerns, the track record shows Nuclear energy has the best safety track record of all energy sources.
In addition to considering the energy density of a fuel, it is also important to consider the environmental and economic costs of using that fuel. For example, fossil fuels, such as coal, oil, and natural gas, are a convenient and reliable source of energy, but they also have environmental costs, such as pollution and greenhouse gas emissions.
Fossil fuels are also a finite resource. Which mean overtime their scarcity will increase.
Renewable energy sources, such as solar and wind power, have lower energy densities than fossil fuels and nuclear. Renewable energy also has the problem of intermittency, which can create a less reliable grid and higher energy costs for consumers.
Energy is a complex topic, yet headline culture would like us to believe that powering the world is simple. Very little is simple about energy, powering the future will require policy makers to understand science, engineering, economics, and physics. This is a tall order to say the least.
When advocating for an energy source, it is important to consider factors such as energy density, environmental impact, and economic cost. By carefully weighing these factors, we can make informed decisions about how to power our world in a way that will promote continued human flourishing for centuries to come.
Ancova Markets Update
Both WTI and Brent have have been trading under $80/bbl for the past week. At the time of the report WTI is trading at $73.37/bbl and Brent is $77.5/bbl. Crude rebounded early Thursday morning after news that the Keystone Pipeline was shut-in due to a leak.
The Keystone Pipeline imports 600,000 bpd of crude from Canada to the U.S. Today, the operator said the pipeline had been shut-in due to a crude leak near Steele City, NE. There was no guidance on when they expect to resume operations.
OPEC+ announced yesterday that the production quotas will remain the same, 2mm bpd lower than October.
The European Union passed the Russian crude price cap at $60/bbl and was implemented December 5th. Russia has responded by saying they will not sell oil to countries who enforce the cap. However, Russia has not had trouble finding crude buyers. China and India have recently increased the amount of Russian crude imports. On a related note, to avoid the caps many crude tankers that were previously registered in Russia, have now changed ownership to other countries, including Dubai. These “Dark Ships” along with others are now shipping Russian crude along with previously sanctioned Venezuelan and Iranian crude.
Enterprise has just been given approval from the Biden Administration for 2mm bb/d oil export terminal in Freeport, TX. The terminal will be 30 miles off the coast and connected to on shore Enterprise facilities via pipeline. The terminal will allow for more efficient oil-loading and reduce transport costs. Construction for could begin as soon as mid 2023 with an estimated in-service date of late 2025.
The EIA Petroleum Status Report for the week ending December 2nd, 2022 was released on Wednesday, production had a minor increase up to 12.2mm bbls. Crude storage had another draw in inventory at 413.1 mm bbls, which was a 5.2 mm bbl decrease from the prior week. Current crude storage levels are 9% below the five year average for this time of year. Refinery run rates continue to climb are running at 95.5% utilization rates. Jet fuel supplied was down from the previous week at 1.3 mm bpd, but still 7.5% higher than this time last year.
After falling to a near 9-month low early in the week, Natural Gas futures hit $6 in this morning’s trading. Warmer weather is trending in the mid-west and northeast and continues to be less of a factor. The Freeport LNG terminal reopening is still without a firm date. Many are speculating the date could be pushed further as a re-start plan has yet to be submitted and approved by pipeline safety regulators. Supply concerns are no longer a reality as gas intended for the facility is now back in the domestic market and has also pushed prices back down. While there is still time for temperature drops and a shift in heating demand, look for prices to stay with the bears as we await the wintertime weather unknowns.
Demand in the Midcon has remained flat this week coming in at 21.3 Bcf/d. While flows into the Midcon declined 5% to 10.3 Bcf/d, year-to-date net flows have increased over 7%, according to S&P Global Commodity Insights. Prices have been mixed this week as prompt month basis did increase by ~ $.10. Chicago city-gates comes in a $.23 discount to Henry Hub, while ANR-OK is $.29 off at $4.24 and NGPL-Midcon is $.49 back at $4.04.
The EIA released storage numbers this morning, coming in at 3,462 Bcf, representing a net -21 Bcf decrease from the previous week. This decrease was slightly more than marketplace expectations of -20. Stocks were 51 Bcf more this time last year, however, this week’s levels are still within the 5 yr. historical range of 3,520 Bcf.
Natural Gas Liquids (NGLs)
Prices in both markets fell off a cliff this week (-6% to -28%) as WTI faltered from the low $80s to low $70s. Ethane prices in Mont Belvieu and Conway, which typically trends with natural gas, accounted for significant drops at 19% and 28%, respectively. N. Gasoline at Conway was the next big loser, plummeting 24% from a week ago. N. Butane at MB was the least affected, dropping 6% WoW.
Talk Energy Podcast
This episode’s guest is Tom Masiero the founder of Standard Bitcoin. A Bitcoin mining company that focuses on a blend of off-grid and on-grid hosting solutions for their clients. Tom is someone I have learned a lot from in the Bitcoin space.
He drops a ton of knowledge in this episode around the current state of the mining industry. We discuss the apparent capitulation happening with Bitcoin miners as they struggle with the historically low hash price environment.
We talk about the lessons learned over the years mining under different set ups. We get into the FTX scandal and other crypto scams that have unfolded this year. Lastly, we talk about the opportunities ahead in Bitcoin mining.
Hope you enjoy the show!
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ANCOVA DISCLAIMER: The opinions expressed in this report are based on information which Ancova believes is reliable; however, Ancova does not represent or warrant its accuracy. These opinions represent the views of Ancova as of the date of this report. These opinions may be subject to change without notice and Ancova will not be responsible for any consequences associated with reliance on any statement or opinion contained in this report. This report should not be considered as an offer or solicitation to buy or sell any securities.
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Your theory of the origin of matter doesn’t make any sense. Are you saying that nothing exploded and created everything? If not, what exploded? It’s been long believed that in the beginning of everything, there was nothing, and without nothing there must have been something which means it was not the beginning. Where in the timeframe of origin of the universe was your explosion, was it before there was anything or after there was something that blew up and became everything? Your mention of the beginning of time leads one to believe that this moment was also the beginning of matter. If not the beginning of matter, then not the beginning of time.