Odd Lots What So Many People Get Wrong About The Energy Transition
Jul 28, 2022
In this discussion, Bob Brackett, a seasoned research analyst at Bernstein with three decades of expertise, reveals the misconceptions around the energy transition. He emphasizes that contrary to popular belief, fossil fuels like coal and oil are not vanishing overnight. The conversation dives into the unpredictable nature of energy policies, the complexities of transitioning to renewables, and the enduring significance of commodities like copper for electric vehicles. Brackett highlights the challenges investors face amid evolving market dynamics.
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Coal's Persistence
- Energy transitions are slow due to persistent demand and supply-side fear.
- Consumers want electricity's benefits, not coal itself, so they rely on it until alternatives are sufficient.
Energy vs. Tech Disruption
- Energy transitions differ from tech disruptions; they take decades, not years.
- This is due to the capital-intensive nature of energy, unlike consumer electronics.
Mercury Analogy
- Mercury, despite its toxicity, still has high revenues due to sticky demand in niche uses.
- This illustrates how commodities decline slowly due to a lack of readily available substitutes.