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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (103181)	6/18/2008 5:55:35 PM
From: Elroy Jetson	Read Replies (2) \| Respond to of 206089

The Chevron - Google solar-steam joint venture is scheduled to deliver electricity to the Los Angeles DWP at 9 to 12 cents per kilowatt hour, compared to the existing DWP cost of 8 cents per kilowatt hour average for coal and natural gas production. This is incredible when compared with the horrible premium of 25 to 35 cents per kilowatt hour DWP pays for photo-voltaic power. In regards to nuclear, we will first need to develop a permanent disposal / recycling solution as France has. Only once this is done can you develop real cost comparisons for nuclear power. When Chevron priced this in, based on French costs along with liability exposure, nuclear power was not actually cost competitive with oil and gas or many other alternatives. In the past this cost has been effectively hidden in the defense budget as part of the weapons program. For decision making, this leads to the wrong conclusions. The biggest problem is going to be what happens in another five to six years when oil prices tumble to $80 from $180-$220, and over-shoots for a period of time on the downside. This will happen, even though it doesn't seem possible or likely today - as demand is destroyed and supply augmented by the new sour/heavy crude refineries in Asia and the Middle East. As with last cycle, sour/heavy crude is the first "alternate energy" of choice as it fits almost all of the current infrastructure and the technology is known. The downside is when crude price drops your refinery is uneconomic, so there hasn't exactly been a rush to pay the $2 billion per refinery upgrade charge. The last price downturn led to the SUV mentality of a renewed dependence on oil and gas through out the economy. Many of the energy saving changes were permanent and could not be undone, but over time many were or new decisions made "wrong" based on existing price rather than likely long-run price. This is a very difficult problem with good arguments on each side, but it determines your long-term security. .