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Given that the current administration isn't too enamored with wind and solar does anyone have any idea what effect this will have on BHE?
If I recall they have quite a few projects in the works.
I read this morning that a fairly major wind project that was about 80% completed (not related to BHE) off the coast of Rhode Island was halted by current administration (a.k.a Trump)

"I read this morning that a fairly major wind project that was about 80% completed (not related to BHE) off the coast of Rhode Island was halted by current administration"

I have a place in Newport and the local opposition to this wind farm is huge. Damage to marine life among other things. Rhode Island is a very democratic state but the protests were strong and a there is a palpable sense of relief with the cancellation.

"I read this morning that a fairly major wind project that was about 80% completed (not related to BHE) off the coast of Rhode Island was halted by current administration (a.k.a Trump)"

Remember that RFK Jr. (former democrat presidential candidate turned Trump sycophant) has been fighting offshore wind for decades on environmental concerns, or possibly driven by the location of the Kennedy compound and the potential impact on the family's ocean views?

https://www.nytimes.com/2005/12/16/opinion/an-ill-...

Maybe Bobby Jr. made a "deal with the devil" to agree to step over to the "dark side" on the condition "Orange Man" oppose these projects?

Maybe Bobby Jr. made a "deal with the devil" to agree to step over to the "dark side" on the condition "Orange Man" oppose these projects?

Trump's climate change denial and his infatuation with big beautiful coal and drill baby drill extend far beyond a single wind project. Nobody sets conditions for Trump, except perhaps for Laura Loomer.

Trump's "infatuation with big beautiful coal and drill baby drill"

Berkshire owns:

BNSF(which transports lots of coal)
Chevron (oil and gas)
OXY (Oil and gas)

Buffett, apparently aligned with Trump, "infatuated" with coal and "drill baby drill" as well.

Trump's "infatuation with big beautiful coal and drill baby drill"

Berkshire owns:

BNSF(which transports lots of coal)
Chevron (oil and gas)
OXY (Oil and gas)

Buffett, apparently aligned with Trump, "infatuated" with coal and "drill baby drill" as well.

That comparison is just about the worst insult you can make to Buffett. As for investing in renewable energy, here is where Berkshire stands -
https://www.brkenergy.com/energy/wind

The video of a BHE Wind Energy construction site is impressive & entertaining,
(Could not find it on YouTube)

“From The Ground Up”

https://www.brkenergy.com/energy/wind

ciao

The video of a BHE Wind Energy construction site is impressive & entertaining

That WAS entertaining. But I suppose non-Nebraska "big city fellas", might be more impressed with something like this:


https://www.spacex.com/vehicles/starship

"That comparison is just about the worst insult you can make to Buffett. As for investing in renewable energy, here is where Berkshire stands -"

Berkshire Wind.

Intermittent and unreliable.
High installation and maintenance costs.
Economic viability highly dependent on government subsidies.
Environmental factors(dead birds, non-biodegradable blades/towers sitting in landfills)
Understated social costs. Big ugly turbines that leave a permanent blight on an otherwise beautiful landscape.
Wonder if Uncle Warren, or Greg would want one in their back yards or view corridors?

Buffett, apparently aligned with Trump, "infatuated" with coal and "drill baby drill" as well.
...
That comparison is just about the worst insult you can make to Buffett. As for investing in renewable energy, here is where Berkshire stands -

Insulting or not, the comparison is inapt.

The concern for Berkshire is whether or not the oil/gas/coal businesses, and their support businesses, are valid businesses to be in: legal and not immoral. They are. (among other observations, we'd all freeze or starve without them for now).

The concern for governments is the degree to which those industries are subsidized, encouraged, discouraged, punitively taxed, or banned.

The farmer's concerns and responsibilities are very different from the relatively bounded world of a given plant in the field : )

It's perfectly reasonable to be an oil driller for a living. It's also perfectly reasonable to do that while desiring a regulatory environment that leads to burning less oil over time. I don't think I'd be happy as (or investing in) a lobbyist trying for oil industry regulatory capture.

Jim

The video of a BHE Wind Energy construction site is impressive & entertaining,

I also found the video impressive & entertaining. It's a serious construction project involving a lot of steps.

It did trigger a question in my mind. How big of a "cost and carbon emissions debt" does a wind turbine build up during construction? How much CO2 and other emissions are generated before the wind turbine starts generating carbon free electricity? Not unlike EV's which also consume fossil fuels in the materials used in their construction - steel, plastics, batteries, etc. And what are the ROIC economics?

I note that there's large amount of excavation required in building the base for the turbines. That's all done by fossil fuel powered machines. There's also a large amount of cement then poured. Cement requires fossil fuels in its manufacture because of the high temperatures required. The core structures of the turbines are made of plastic, as well as the turbine blades themselves. Plastics also require high temperatures to make the monomers that ultimately result in their end products. There's the internal steel machines, also requiring high temps for making the steel. And transportation and erection also require energy delivered by fossil fuels. Finally turbines have a finite life - they must be disassembled and disposed of, again requiring energy from ICI driven machines? And there's the question of using batteries for storage during periods of excess energy production and grid support when the wind doesn't blow. And there's also operating and maintenance costs.

This is an honest question. Not trying to argue against wind power. But it's not carbon free energy immediately. And what is the ROIC without subsidies?

Put another way, what is the "payoff period" for wind turbines before they start really generating carbon free power and net cash flow?

I found this interesting analysis from an AI search. It concludes, based on a 25 year life span, it takes 6 years and 7 months to start achieving an economic return.

https://todayshomeowner.com/eco-friendly/guides/ho...

So electricity from wind power helps reduce carbon based emissions over time. It isn't immediate - you first go into an emissions "debt" and then retire it over time. However this time, depending upon many factors, can be pretty quick - 6 months. It's the economics that take time.

Makes one wonder what the economics are without government subsidies? Buffett has stated before that he wouldn't invest in solar without the subsidies. How might changes in wind subsidies impact timing?

I'm glad I asked myself the question and did a little research. Wind is a move in the right direction, but the payoff isn't immediate.

I need to look at this in more depth. Has anyone?

https://youtu.be/fmbZwxEnAFc

Landman clip! A little reference from popular culture

It did trigger a question in my mind. How big of a "cost and carbon emissions debt" does a wind turbine build up during construction? How much CO2 and other emissions are generated before the wind turbine starts generating carbon free electricity? Not unlike EV's which also consume fossil fuels in the materials used in their construction - steel, plastics, batteries, etc. And what are the ROIC economics?

The way I look at it, the answer is in the cost. Every process and product we build or buy has an energy cost that is reflected in the price we pay. Ultimately we're always paying for energy and not much else. So when you look at a wind turbine, the financial payback reflects the clean energy payback. Keep in mind that, as we convert our energy sources to renewables, the "carbon emissions debt" that we generate will be proportionally smaller.

To give an example, when I installed solar panels at my house I figured that the payback period was 10 years (7 years after govt subsidies). So the time to pay back the carbon debt from building and installing the panels would be ten years, if all the energy to do so was generated from fossil fuels. If half of that energy was actually produced from renewables, then my carbon debt would be paid off in 5 years.

Elan

The way I look at it, the answer is in the cost. Every process and product we build or buy has an energy cost that is reflected in the price we pay. Ultimately we're always paying for energy and not much else.

It's a good rule of thumb.

For example, it shows how absurd "food miles" are as a unit. Shipping something around the world on a giant ship is spectacularly fuel efficient, so it's not the distance that matters. If it weren't fuel efficient, those things would be expensive.

A somewhat better "green food" metric would be unitless: units of energy used in transport per calorie of food delivered. A horrible number if you drive an SUV to the store, which is often the largest part of the energy cost. Just another way of noting that most food, even stuff transported from afar, has a relatively low energy cost before you buy it. The bad ones are clear in the price: in winter in Europe we see cherries flown in from Chile, and they run around 35-60 euros/kg at the start of the season. About $0.50 per cherry.

You do have to do a mental adjustment for things that are heavily subsidized or have large negative externalities, as they can have large costs that don't show up in the sticker price.

The price isn't all energy, though, a lot of things come down more to labour cost. I don't think that's to be avoided or adjusted...though there are abuses in the world, that is far from the majority situation. On average I'd rather buy something made by somebody not paid a lot, because on average those low wages probably do more for them where they live than high wages do for an alternative worker in the developed world.

Jim

Shipping something around the world on a giant ship is spectacularly fuel efficient, so it's not the distance that matters. If it weren't fuel efficient, those things would be expensive...

You do have to do a mental adjustment for things that are heavily subsidized or have large negative externalities, as they can have large costs that don't show up in the sticker price.

And it's these negative externalities -- where the market price in no way appropriately reflects the environmental costs incurred in their extraction and consumption -- that are the crux of the objection to the "cost paid reflects the energy consumption and thus the environmental impact" thesis propounded in this thread. It's not a 'good rule of thumb' when the discussion is centered around environmental costs.

Shipping a case of pinot noir from France or chardonnay from Australia for consumption within local distribution distance of west coast vineyards, only to sell all of the bottles at around the same price point? By weight, the products are almost all glass and water.

I hear Charlie Munger inveighing against the stupidity of burning our long chain hydrocarbon reserves for fuel, whether it be an SUV to the grocery store or a behemoth of a container ship banging off whales all the way across the Pacific.

--sutton

And it's these negative externalities -- where the market price in no way appropriately reflects the environmental costs incurred in their extraction and consumption -- that are the crux of the objection to the "cost paid reflects the energy consumption and thus the environmental impact" thesis propounded in this thread.


There are a lot of costs involved in building a wind turbine that are not energy costs, so one might think the rule of thumb doesn't work, but I think the point is that if the energy costs of building the wind turbine (and the blades, and the tower, and the installation,, and the wires going to it, etc. etc.) were a large proportion of the energy produced by the windmill over its lifetime, or even, as some claim, if those energy costs were superior to the windmill's output, then it would never make any economic sense to build one. Since there IS an economic case for windpower, meaning you CAN conceivably pay back those energy costs of production, INCLUDING the non-energy costs, it must be that there is some positive energy output, net of the energy costs of production.

But perhaps an environmentalist would find this more convincing if it were possible to isolate the energy costs of setting up windpower infrastructure, and of course, that analysis has been done. In general, the findings are that the energy inputs represent about 1/20 to 1/40 of the energy that the windmill will produce over its lifetime, assuming that it is placed in a sensible place where there is enough wind. More details below from one good article addressing these issues:

"As widely presented in several wind energy reports (NREL (Lantz et al., 2019), Vestas (Wind Systems, 2020) et al.), steel tower contributes to about 30% of the total carbon footprint left during the manufacturing of wind turbines, while the concrete foundation and the carbon fiber plus fiberglass blades making up 17% and 12% of carbon impacts, respectively. According to these reports, the carbon cost can generally be amortized by extending the lifespan of the wind power system, and its carbon footprint is 99% lower compared with coal-fired power plants, 98% lower compared with natural gas, and 75% lower compared with solar power. Moreover, wind turbines (including both onshore and offshore configuration) produce about an average of 11 g of CO2 equivalent per kilowatt-hour (11 g CO2-eq/kWh) of electric power generated, while for solar power with 44 g CO2-eq/kWh, for natural gas with 450 g CO2-eq/kWh, and for coal with 1000 g CO2-eq/kWh (Carrara et al., 2020). These figures are not static, particularly in the case of wind power as a result of advancing technology. For instance, the carbon footprint of the monstrous offshore wind power plant is expected to fall to 6 g CO2-eq/kWh in the future. In general, the greenhouse gas emissions by onshore and offshore wind power plants can vary depending on the capacity factor, component materials’ recovery rate at the end of the life cycle, and wind turbine mass (Bhandari et al., 2020)."

https://www.sciencedirect.com/science/article/pii/...

Shipping a case of pinot noir from France or chardonnay from Australia for consumption within local distribution distance of west coast vineyards, only to sell all of the bottles at around the same price point? By weight, the products are almost all glass and water.

The reasoning sounds so simple, but that's why it's important to debunk it. If there are no subsidies and it costs (say) $0.25 to ship an incremental bottle, you likely haven't used as much energy (or created as much energy-related pollution) as, say, driving a mile in a big SUV to a local farmers' market.*

True, maybe it was $0.25 worth of energy that didn't really have to be used, but it really is one of those fields of endeavour that you have to have a sense of proportion. Sweating the little stuff is not just a waste of time, it is actively bad because it distracts from what's actually important and causes many to throw up their hands in "it's all the same, you can't win" surrender.

Subsidies and negative externalities certainly matter, but they generally don't change the "sort order" of activities or products by much. Most things aren't subsidized by more than 100% of their cost, and the true economic cost of most bad externalities are not more than a few times the size of the market cost of the same thing.

If you really want to be green with a sense of proportion? Don't have kids (bigger factor than all other factors combined), be dirt poor (bigger factor than all remaining factors combined), don't drive or fly much (mainly walk to work), and don't buy beef or lamb.

Jim


* A typical Australia-to-Europe container ship run uses around 2 million gallons of bunker fuel.
It would typically hold around 10000 20 ft containers, so 200 gallons of fuel burned per container.
A typical (but full) 20ft container will hold around 10000 standard sized bottles of wine for shipment, so .02 gallons of fuel per bottle of wine, about 2.6 US fluid ounces. Like burning a single candle during your dinner with that wine from the other side of the planet.
A large SUV might get 0.3 to 0.5 miles on that much gasoline.

As elann pointed out, the fact that the shipping is very cheap is an outstanding clue that it's not all that bad environmentally.

Jim

My bias shaped by careering it in an Int’l Transportation company, I absolutely appreciate and embrace the more nuanced view that prioritizes energy consumption and overall supply chain efficiency over mere distance.

While local food can reduce transport emissions, it is not always the most sustainable option. A local product might require more energy for production, storage, or processing than a globally sourced one. OJ concentrate moved in oboes from S.AM a sound biz prop vs. FL sourced.

Just one man’s…

Grateful Always,

PaulnKC

Makes one wonder what the economics are without government subsidies? Buffett has stated before that he wouldn't invest in solar without the subsidies. How might changes in wind subsidies impact timing?

Like everything, it depends. But generally new unsubsidized wind is cheaper than new nuclear and coal, but more expensive than new natural gas. Because wind energy isn't dispatchable, sometimes it makes more sense to look at the cost of the energy it displaces.

There is another external cost to consider too: economic security. Our entire economy is based on fossil fuel energy. Sure, there is a bit of nuclear and a tad of hydro and others, but fossil fuel energy is the choo-choo that pulls the whole economic train. The problem is that oil is a fungible commodity. A disruption anywhere causes prices to spike everywhere. I asked Perplexity "Since WWII how many recessions were caused or preceded by oil shocks?" It answered:

Since World War II, almost all U.S. recessions have been caused or preceded by oil shocks, with only one exception. Ten out of eleven postwar recessions were preceded by a sharp increase in oil prices—a phenomenon often referred to as an oil shock.

Of these, six major recessions were caused directly by oil shocks which resulted in a contraction of between 1.7% and 4.3% of GDP. Our reliance on cheap oil has enormous secondary costs. Most US planners understand this. That's why our military has been parked in the Middle East for decades and we cut deals with unsavory characters like the Shah of Iran and Saddam Hussein. The US and Saudi Arabia have a security arrangement. We protect them, they pump oil. Try to guess which US president who that deal. The answer is Franklin Roosevelt. The US didn't need the oil. But FDR wanted the Saudis to pump oil to support the world economy, which in turn means our economy. Even back then it was clear. We cannot afford a disruption in the flow of oil.

But we getting to the point--not quite there, but getting there--where we have some options. We're on a trajectory where we could greatly decarbonize the transportation industry, electrical generation, building heating, and so on over the next few decades. The more we do this, the more we insulate ourselves from oil shocks. Losing 1% of GDP to an oil shock today would translate to about $230 billion of lost economic value.

Canceling wind and solar projects is a mistake. The Revolution Wind project mentioned above was about 80% complete and already connected to the grid. Canceling it was a non-sensical waste of money. Everyone agrees that US will need significant new generation capacity in the future. These policies blocking new generation seem very foolish and short sighted for a host of reasons. One country who sees these issues very clearly is China, who is building renewables at an astonishing rate. By 2030 about half of electricity in China will be from renewable sources.

Shipping a case of pinot noir from France or chardonnay from Australia for consumption within local distribution distance of west coast vineyards, only to sell all of the bottles at around the same price point? By weight, the products are almost all glass and water

I’m not going to say for certain that it’s all or even most French wine, but at least some is shipped in container-sized plastic bladders to Australia, and bottled upon arrival. I was shocked when I first heard about it, but basically they said it was stupid to pay to ship all that glass.

The price of oil looks like a timing indicator. Eyeballing the chart, if the price of oil has doubled in 2 years or less, get out of the market for a year.

Aussi

Because wind energy isn't dispatchable,

Wind and solar are not dispatchable. That is the killer.

The Germans have a word for a period with no wind or sun: Dunkelflaute.

"Recent "Dunkelflaute" (periods of low wind and little sun) include the 35-day event in the UK and Europe from mid-October to mid-November 2024"

"A single Dunkelflaute event typically lasts from a few hours to a couple of days. However, as seen in late 2024, they can also stretch for weeks."

Unless people are fine with freezing in the dark, you need spinning dispatchable electricity.

Even short term, a lull in the wind or a sudden cloud cover plays havoc. I forget the exact figure, but I think that electrical grid become unstable above about 35% wind/solar. Look at the recent events in Spain & Australia.

Probably a good place for wind/solar is the huge electrical demand of AI farms. But when they are building power stations for them, they are installing thermal powerplants and not wind/solar.


One country who sees these issues very clearly is China, who is building renewables at an astonishing rate. By 2030 about half of electricity in China will be from renewable sources.

Um, #1: You cannot believe anything that China says.
#2: China is building 1-2 new coal plants a week.

Um, #1: You cannot believe anything that China says.
#2: China is building 1-2 new coal plants a week.

Not sure how statement 2 logically aligns with statement 1??

Aussi

"Um, #1: You cannot believe anything that China says.
#2: China is building 1-2 new coal plants a week."

Not sure how statement 2 logically aligns with statement 1??

#3: Refer to #1.

Re your question, I just asked google. But it's a valid question so I asked google "how do we know china building coal power plants"

The first (AI) hit said "AI Overview
We know China is building coal power plants primarily through reports from energy-tracking organizations like Global Energy Monitor and the Centre for Research on Energy and Clean Air (CREA), which use data on project permits, construction starts, and existing plant databases to document this activity. These findings are corroborated by news reports from outlets such as Reuters and The New York Times.

Here are the key ways this information is gathered and confirmed:
Energy Monitoring Organizations:
Nonprofit organizations like Global Energy Monitor (GEM) and CREA continuously track and publish annual reports on the global energy landscape.
They maintain detailed datasets, such as GEM's Global Coal Plant Tracker (GCPT), which documents every known and proposed coal-fired generating unit worldwide."

which use data on project permits, construction starts, and existing plant databases to document this activity.

So project permits and construction starts would be Chinese databases so I think this is a circular argument.

Also, the number 1 or 2 per week seems an unusual broad number when constructing a major facility. That is 50 to 100 per year.

Aussi

"Everything is a lie.
And no I don't have a link."

Re your question, I just asked google. But it's a valid question so I asked google "how do we know china building coal power plants"

Now do a similar exercise. "Ask Google what percentage of new electrical general capacity in China in 2024 was from renewable sources?" Now do the same exercise for coal.

Pick whatever sources you like, but one of those is an order of magnitude higher than the other (hint: coal isn't the higher one). As investors, we understand rates of growth and the power of compounding.

If you like, you can keep drilling down. Compare the rates of growth over the say, the last five years. Again, one is much larger than the other and it isn't close.

Um, #1: You cannot believe anything that China says.
#2: China is building 1-2 new coal plants a week.

So we can't trust anyone to tell us how much renewable energy China produces, but we can trust AI to tell us how many coal fired power plants they're building. Yeah right, that makes perfect sense.

The price isn't all energy, though, a lot of things come down more to labour cost.

But again, the cost of labor is the cost of feeding and housing and clothing and transporting the laborer. There may be some residual cost, reflected in the amount of money the laborer can save to spend on energy later in her life, but that's about it.

It's all energy. The biggest exception I can think of is the invisible environmental cost which can remain hidden and unaccounted for over a very long time. It will eventually have to be paid too, in energy, but too many people think that the debt will come due so far in the future that its present value is practically zero.

i recall the old days in the port of SETE in France, just down the road a bit. they hd wine cargo vessels for transporting thousands of gallons of cheap languedoc wine. it was used variously to give body to other thinner wines (esp. mainly reds) and what was left was made into vinegar around the world. fast forward 40 years, there is an continuous improvement in the local wines,but still there are some wine container ships... btw , for lovers of this regions very drinkable wines, yields are down almost 40% due to continuous heatwaves this summer.picking was done often by night to pick cool, the vendange was very early, and many domaines hired handpickers to get very grape they could. expect price rises....

speaking of SETE , Larry Ellison berths his yacht there, must be the cheapest berth in France !

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