Subject: Re: OXY ownership on this board
Here's a quick view of 2023's progress in renewables:
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Although I share your hope that renewables will replace fossil fuels ASAP, let me play the devil's advocate, because although I think renewable power is the future, it is a fairly distant future, IMO:


"batteries are coming online faster than any other sort of power plant" [CA only?]


This is surely not true worldwide, although it may be true in California. China ALONE is said to be opening 2 coal-fired power plants every week, typically about 1000-2000 MW each, let's say 1500 MW for the sake of simplicity, so 3000 MW of coal-fired production every week. By way of comparison, as of October 2023, California could store 6600 MW of power for 4 hours, and they hope to get that up to 52,000 MW (a very confusing battery-storage terminology by which they mean 52k MW for 4 hours, the industry standard length of storage) by 2045. If this sounds ambitious, it means that (perhaps optimistically) they thinks that in 22 years, they will be able to store the power output of the plants built in China in the next 4 months. China itself is up to 59 GW, or 59,000 MW, so the will be able to store the output of about 40 1500 MW plants. The expect to grow that by 19% a year, meaning they might build out 11,000 MW of storage, i.e. enough to store the production from about one month's worth of production. In other words, fossil fuel will remain by far the growth leader in China, for at least the next few years. India, which is probably the other major growth centre, is very likely to rely even more heavily on fossil fuels.


"[Texas is the] leader in utility-scale solar"

This doesn't really say anything about fossil vs renewable.


"Clean energy to make up 84% of new U.S. power capacity in 2023"

Yes, the US has a slowly growing power system and most of the new capacity will be renewables (if that's what they mean by 'clean'), but that also means there will still be growth from fossil fuels, as nuclear energy use is (unfortunately) declining in the USA like elsewhere; in the USA, no plants were built between 1978 and 2013 (!!); 93 plants are operating, 1 is under construction, and most are towards the end of their lifespans.

"Global renewables deployments to hit record levels in 2023"

Yes, deployments are increasing, so each year establishes a new record, but the point is, the numbers are still small. Renewable energy accounts for about 30% of world production, but most of this is from hydro, and there aren't many new opportunities for this. Wind and solar and other non-hydro renewables are still only about 10% of world production.


"by 2030, technology improvements could slash the price of wind energy by a quarter and of solar by half"

They could. They have certainly slashed the price of fossil fuel production, too. But what we really need is much cheaper batteries, and unfortunately, the progress there is much slower. As long as we insist on reliably available power, renewables only make sense when they are paired with batteries, so the cost of renewables alone is not really the issue (they are already cheaper than fossil fuels). The issue is what is the cost of renewables PLUS batteries, and that has generally been decreasing, but decreasing painfully slowly.


"[In the US] more than 100 new clean energy manufacturing facilities or factory expansions were announced, adding up to nearly $80 billion in new investment from private companies"

It's hard to say what proportion that might be of total spending, but that doesn't sound like a big number.


"Americans bought more heat pumps than gas furnaces last year"

Heat pumps are great, they reduce heating energy use by about 2/3 and by even more for cooling. But for heating, electricity is inherently only half as efficient as combustion in the home, so the gains are not that great, at least not for heating, as long as the electricity is coming mostly from gas anyways.


Getting this back to Berkshire, I think coal and gas and oil are still investable going forward, as increasing populations and prosperity generate increased demand in the face of stagnant supply. I think the fear of what fossil fuels might do to us is perfectly justifiable, but unfortunately, we are going to be using them for a long time, whatever the consequences end up being. I think there may be a lot of pessimism about fossil fuels' immediate and medium-term future priced in already, so I think Buffett's big oil bet, and bets on other fossil fuels (I like Yancoal) could do quite well.

Regards, DTB