A few Important Energy Stories that You Need to See

There have been a few important developments in the world of energy that everybody needs to be aware of. The energy industry has become more unstable than ever even without the appearance of disruptive technologies like low energy nuclear reaction (LENR) and it looks like it is about to get worse.

Construction of Elon Musk's Gigafactory is well under way.

The biggest story is that the collapse in oil prices is destabilizing many countries including Russia and Venezuela. News stories indicate that super market shelves in Venezuela are empty because the government cannot pay for food imports and that nation’s president is frantically traveling around the world begging for loans and foreign aid to keep his country’s economy functioning. Venezuela’s economy is totally dependent on oil exports, take away the oil exports and the result is depression.

Some economists are now worried that the fall in oil prices will lead to deflation. Deflation is an economic condition that occurs when prices keep falling and falling. In deflation producers and sellers get less for the products and have less to spend. Deflation can be devastating, it was one of the main causes of the Great Depression.

Falling prices are not the only thing that could destabilize the oil market. There are now strong concerns that the war in the Middle East could spread to Saudi Arabia. In January a number of news outlets including Newsweek reported that ISIS terrorist forces had over run a Saudi border outpost.

The Saudis are so worried about ISIS that they are building a 600 mile long wall designed to keep ISIS out. The wall will consist of a triple layered steel fence with 40 watch towers. Advanced sensors will be used to detect invading terrorists and alter 240 armored vehicles that will respond to attacks.

The US is so worried about the situation in the Middle East that 4,000 soldiers from the US Army’s Third Brigade Combat Team have been deployed to Kuwait. It looks as if the US is getting ready for a ground war against ISIS.

Even as oil prices fall, another disruptive technology is gaining acceptance in the auto industry electric cars. Last month General Motors (NYSE: GM) unveiled a prototype for one of the cheapest electric cars yet the Bolt. The Bolt could run up to 200 miles on a charge of electricity giving it a longer range than Telsa’s Model S sedan. If that wasn’t enough The Wall Street Journal is now reporting that Apple Inc. is researching the possibility of manufacturing or selling an electric car.

These electric car announcements are no coincidence. They’ve been made as construction advances on Elon Musk’s gigafactory in Northern Nevada. The Gigafactory could churn out enough lithium ion batteries a year to store 50 gigawatts or 50 billion watts of electricity a year by 2020. It will also produce enough power cells to store 35 gigawatts of electricity a year. If that wasn’t enough it could reduce the cost of such batteries by 30%.

If successful the Gigafactory could make electricity as easy to store as gasoline. That could make off grid storage of electricity possible and solar more practical. If that occurred energy will be cheaper and more plentiful and the disruption of the economy magnified.

The energy industry is changing drastically and dramatically changing the entire world and our lives. One has to wonder how we’re going to deal with a world in which energy will be both cheap and plentiful.

 

5 Responses to A few Important Energy Stories that You Need to See

  • Ed says:

    50 gigawatts is power not energy. Energy in electricity is in watt hours not watts.

    • jennifer says:

      Hard to say because the gigaplant is not done yet. I’m just repeating Musk’s terminology.

  • Deflation is not what is happening today.
    Cost of products in term of work normally decrease, that is productivity.
    Oil price reduction is just tax reduction.

    the effect of those cost reduction is to increase consumption, and this is already happening. or course, like for telecom prices, it does not increase consumption of the product but mostly other goods and services, or create new needs.
    This is GOOD.

    I’m puzzled why deflation myth is growing so much.

    The fact that 1929 crisis was fueld by deflation is not so real, because the problem was very complex. the desperate behavior of central bank and governments to block the situation is the main cause…
    note that New Deal QE is what we do in one month or alike… we are injecting quantity of money absolutely crazy, and this is creating inflation, not of goods, but of assets.
    I suspect that those whop war of deflation, just want free money for decades so they can continue to exploit an asset bubble.

    the day people seriously realize LENR is the solution, all the trillion injected into the economy will get freed instantly to launche the revolution. Ther will be huge inflation, but since there will be huge growth and huge expected improvements, it should be good on average… just troubled.

    • jennifer says:

      I have to disagree. We’re seeing deflation whether we want to admit it or not. One problem is that deflation in commodities can fuel inflation in currencies just ask our friends in Venezuela. The problem is that the effects are good and bad. You and I pay less at the pump. Meanwhile oil workers are on the unemployment line.

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