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Chesapeake Energy Corporation Message Board

cadmium_telluride 15 posts  |  Last Activity: Jun 16, 2015 1:40 AM Member since: Dec 28, 2007
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  • Reply to

    The Enemy Within Is The Problem

    by cadmium_telluride Jun 7, 2015 2:45 PM
    cadmium_telluride cadmium_telluride Jun 16, 2015 1:40 AM Flag

    Coal is NOT going away. But the enemy within is destroying the US coal industry. I really mean enemy within, within the ranks of coal corporation managements.

    Sentiment: Strong Buy

  • Reply to

    The Enemy Within Is The Problem

    by cadmium_telluride Jun 7, 2015 2:45 PM
    cadmium_telluride cadmium_telluride Jun 14, 2015 4:14 AM Flag

    The enemy within is the problem!

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jun 14, 2015 3:52 AM Flag

    Coal is NOT going away. But the enemy within is destroying the US coal industry. I really mean enemy within, within the ranks of coal corporation managements. What haven they done three years ago when they had the chance to cut production, and they vowed to do it. Did they? Where is the production cut?

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jun 10, 2015 4:03 AM Flag

    My other number 132 billion square meter was off by 10, after I double check. So it costs 5100 square miles of solar panels to provide enough electricity to replace coal, not 51,000 square miles. But 5100 square miles is not a small number. Roughly the area of Connecticut.

    And it still cost $5.28 TRILLION to install that many solar panels. Not to mention the gigantic energy requirement to produce that much solar panel. In average it costs one thousand KWH of electricity to produce, transport and install each one square meter worth of solar panels. You do the math.

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jun 9, 2015 3:13 AM Flag

    To answer Tristem's original question.

    For solar PV to scale up to replace coal's 38.7% electricity generation, you need to scale up current solar PV install base of 15 GW by 88 fold, or to reach 1320 BILLION watts. Or 1.32 TRILLION WATT. It costs $4 for each watt of installation so it will cost $5.28 TRILLION, or 1/3 of US annual GDP to install that much solar panel. I have not calculated the energy cost to produce that many solar panels.

    One square meter worth of solar panel provides roughly 100 watts of rated capacity. So we are talking about 132 BILLION square meter of solar panels needed. If we line them up into a strip of one meter wide, the length will be 132 billion meters, or 132 million kilometers, almost enough to reach from the earth to the sun (the distance is 150 million KM).

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jun 9, 2015 3:00 AM Flag

    Corrections. I was wrong with the US work force numbers. The 175K workers in the US solar industry was right, but the other number was off.

    A recent report says there are now Twice solar workers than coal workers in the USA. The statistics is now 93K coal workers responsible for 38.7% of US electricity, and 175K solar works responsible for 0.44% of US electricity, and then there is 9800K oil/gas workers responsible for 28% of US electricity plus all the transportation fuels.

    In terms of energy productivity, a coal worker produces 166 times more electricity energy than a solar worker. Since the US oil/gas industry produces only twice as much energy as the US coal sector, each coal worker is 50 times more productive than the US oil/gas worker in terms of energy yield.

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jun 9, 2015 2:46 AM Flag

    Let's give some numbers.

    The US produced 4.1 trillion KWH of electricity in 2014, Out of which 1.586 trillion KWH was from coal. So coal was 38.7% of the total electricity generation.

    The US has cumulatively installed 15 GW worth of solar PV capability, including 6.2G newly added in 2014, and the US solar industry employees 175,000 work force, mostly for installations.

    Now, one watts of solar PV generates average of 1.2 KWH of electricity for the year. So 15 GW generated 18 billion KWH of electricity in 2014. Compare with total electricity of 4.1 trillion, the solar was only 0.44%. Solar generated 1.137% worth of coal electricity in the US. To take over coal, we need a 88 fold of increase in the scale of US solar industry. Which requires a 88 fold increase of the work force, from 175K to 15.4 million. Ten times more US workers will have to be trained to install solar panels, rather than construct homes, to meet the demand of generating enough electricity to replace coal.

    What's the labor and resource cost of solar? The US coal industry employs half a million worker to generate 38.7% of US electricity. So the solar industry employs 35% of the coal work force, and generated only 1.17% of the coal energy. The productivity of a solar worker is thus only 3% that of a coal worker.

    And the monetary cost? $4 to install one watts of solar. So it costed US economy $60B to install those 15GW of solar panels. At current powder river coal price of $10 per ton, $60B is enough to buy coal for EIGHT years worth of US coal supply, but generated 0.44% of US electricity instead. What a waste!

    Sentiment: Strong Buy

  • Reply to

    The Enemy Within Is The Problem

    by cadmium_telluride Jun 7, 2015 2:45 PM
    cadmium_telluride cadmium_telluride Jun 9, 2015 2:22 AM Flag

    NILSY is mainly a nickel and copper player, palladium hardly register a remarkable percentage in their revenue, so they are not sensitive to palladium price and is not a good palladium play. SWC now remains the only viable palladium play now.

    Sentiment: Strong Buy

  • Reply to

    The Enemy Within Is The Problem

    by cadmium_telluride Jun 7, 2015 2:45 PM
    cadmium_telluride cadmium_telluride Jun 7, 2015 2:55 PM Flag

    The enemy within is destroying the US coal industry, and management is going to walk away with multi-million dollars laughing their way to the banks after they file bankruptcy!!!

    I cannot deal with that! Let me tell you another example of energy within.

    If you remember, I had been the most vocal advocate of precious metal palladium investment. I predict that palladium will perform far better than gold and silver, and call people to buy palladium, and remind people there are only two primary palladium players: SWC and PAL. I openly called the PAL management: You have a $80M cash reserve and no debt. Go produce a palladium mine at 100% purity grade and only $165 per ounce cost. The palladium mine is called Swiss Bank palladium stockpile. They never listened, instead they spent the money to buy a low grade gold mine which has a cost exceeding $1900 per ounce gold. Today palladium is $800 per ounce, and PAL stock is worth 5 cents per share. Had they listened to me, $80M can buy nearly half a million ounces of palladium which would be worth $400M today.

    Do these people even know how to respond to market price signal?

    Why the coal miners keep producing coal at half a penny per pound? Why they insist on destroying their own industry? Why the crooks get away with the crime?

    The shale gas bubble is going to burst. The coal price is going to recover. But if every single coal producer is going to be driven to bankruptcy, DELIBERATELY, and no one will survive, then I do not know how to reap that investment opportunity? Maybe short shale players instead?

    Sentiment: Strong Buy

  • cadmium_telluride by cadmium_telluride Jun 7, 2015 2:45 PM Flag

    I had hoped for a quick coal recovery since 2012. But I have been proven wrong and wrong again.

    It cannot be wrong. It shouldn't be wrong. Coal is a cyclic commodity market. There is no possibility that the world stops burning coal tomorrow. In a normal market, when the price is too low, the supply is cut, and demand is boosted, and price recovers. That's economy 101.

    But for some reason economy 101 no longer works. The problem is the Enemy WITHIN. The worst enemy is hiding within the coal industry, trying to destroy their own industry.

    I remember back in 2012, natural gas companies all vow to curtail and cut production. Likewise coal companies all promised to curtail production. None of the gas companies fulfilled their promises, they all continued to expand production like crazy. And coal company only delivered small cuts. Symbolic cut that is simply not enough to turn around the market.

    What have they been doing in the past three years? PCX went bankrupt twice. But even bankruptcy does not force they to reduce their production. What can force a producer to cut, if bankruptcy itself does not do it?

    Today, the powder river coal is selling for $10 per ton. $10 for 2000 pounds of coal. That's HALF A PENNY for one pound of coal. You dig up dirty and it is probably more expensive than that. You hire some migrant working to remove dirty in your backyard and it can cost $1 per pound.. Why they keep producing coal for half a penny per pound? There are enemies within!

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jan 25, 2015 9:34 PM Flag

    So at this point. I am not going to make a timing call. I am unable to predict when they will finally notice the coal price, and realize that they need to cut production to return the market supply demand to normal. Until they do so, coal investment is going to suffer. There is no light at the end of tunnel, UNTIL and UNLESS they start to do something to remove the excessive supply.

    I am not going to sell my shares at $1. I will hold on, whether these coal companies all go bankrupt or not. I still believe economy 101 will return to work, and coal price will return to normal. I just do not see what will finally get their butts moving in the right direction.

    Same is true, and even more so, in the shale oil and gas industry. They plunged more than three trillion dollars of investment money in the shale development, even since the start of the so called shale revolution. They have not yet seen a single penny of investment return for the three trillion dollars of wasted money. When do they run out of the foolish money?

    When do basic economy 101 rule return that smart money chases where profitability is? It is surely not In the shale sector. Is three trillion dollars wasted not enough?

    Sentiment: Strong Buy

  • cadmium_telluride by cadmium_telluride Jan 25, 2015 9:27 PM Flag

    I thought coal as a a commodity sector should always be cyclic. Basic economy 101 of supply demand should dominant. When supply is too high, price drops and producers cut production to return to balance. Vise versa, when supply is tight, price goes up and producer increase production to balance with demand. Of course the consuming sector also will do their part to respond to price signal.

    I was wrong. The economy 101 has broken down. For three freaking years, the entire world shut their eyes blind and gives no d--mned response to the price signal whatsoever. Not coal consumers, and not coal producers. Producers have barely cut production regardless of the un-profitable coal price. They continue to invest heavily on capital spending to maintain production level, despite of the fact that they need to preserve their cash and can not afford the capital spending to expand production.

    JRCC and PCX went bankrupt. In a normal world, when you go bankrupt you go out of business and shut the shop down. Some how they merely changed share holders and get another batch of bank loans and continue produce happily at a heavy loss. I see no production cut from these two bankrupt coal company.

    So I am at loss. If three years low coal price is not strong signal enough to tell the coal producers you've got to cut production. If even bankruptcy cannot force producer to cut production. Then what market force can eventually force they to cut back and return the market to normal? Some thing has got to give but I do not know what it is. The way it goes, if coal price drops to zero, they will still manage to produce the same amount of coal, and put free coal on the roadside to beg people to take them. But they will not cut production.

    The bottom line is had producers cut production aggressively three years ago, things have been taken care of and we would see a normal market today, with normal coal stock price. But as bad as it is now, going to below $1 stock price, they still do not cut!

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jan 12, 2015 10:14 AM Flag

    Yes from 2000 to 2008 natural gas price for FOUR TIMES shot above $10 or more. But from 2009 to today, six years, it never shot above $10 even once, despite of the nature that shale gas wells decline way much faster than conventional wells, and the supply is thus more unstable. It's just because there is an endless stream of foolish money supplied to the shale industry to keep them drilling like crazy. And producers would prefer to keep drilling and supply the market with free gas if delivering continued production growth makes investors happy and makes the investment money keep coming. Who cares shale gas profitability when the foolish money keeps coming?

    All counted, more than THREE TRILLION DOLLARS have been poured into the shale industry, and the industry has yet to show it can earn a penny of profit from has revenue. In a normal world, investment money chases where profitability is. Such an enormous amount of foolish money keep chasing an un-profitable sector, the shale gas sector, is unprecedented! But it can not last forever!

    Coal has no need to exist if they can keep producing natural gas and keep supplying the market at a heavy loss, and investors are happy to pour trillions of dollars into the shale gas sector and do not care a bit that they are not getting any revenue return. But this insanity can not last forever. The shale bubble will burst. It just will take longer than any one expected. I am hanging on to coal, however long it takes for things to turn around.

    Sentiment: Strong Buy

  • cadmium_telluride cadmium_telluride Jan 8, 2015 4:06 AM Flag

    Now the good news is the sudden and free fall oil price collapse, which no one expects, destroys about $200B of lost oil revenue of the big oil/gas industry. This is lost capital money which is no longer available to they to keep drilling wells. I hope this finally stops the insane growth of the un-profitable shale industry.

    And I hope this is a wake up call to oil/gas investors. The irrationality has reached an extreme. Out of the energy investment mix, 99% of money invested in energy is invested in oil and natural gas, and only 1% is invested in the coal sector. Now the foolish people suddenly discover that when 99% of people rush to one side, it's not profitable as the oil and gas price collapsed. When investment money exodus from the oil/gas sector and well drilling finally stops, production will collapse as well declines catch up, and energy prices, including coal price, will finally return to normal.

    From 2000 to 2008, natural gas has FOUR times shot up to over $10. From 2009 to today, 2015, gas price has not even once sot above $10, thanks to the insanity of so called shale gas revolution. Maybe, finally it is time to go back to show the nature of natural gas being extremely volatile. May we see $10 gas again this year.

    Sentiment: Strong Buy

  • Two and a half years ago I saw natural gas drop to $1.90 and coal price dropped in sync. I expected a quick turn around. I pin pointed the turning around of natural gas price on April 19, 2012. But I was wrong in predicting the subsequent collapse of the shale industry and skyrocketing natural gas price. But I was wrong.

    Folks still remember back in April 2012, practically every shale gas company vowed to cut production, as $2 gas was simply not profitable. It was far below profitability. But none of the gas producers took their production cut promise seriously. Those production cut promises were soon forgotten. Everyone continue to drill like crazy and produce like crazy, against rapid shale well declines. Shale wells decline faster. But producers burn money and keep drilling even faster, building up more debts. And gas price remained largely below $4, now below $3. And there is no sign producers will pause their well drilling.

    The reason is that the hugely un-profitable shale industry hinges on obtaining endless supply of fresh capital money to survive, in terms of new investment money and bank loans. The only way to continue to receive this money is deliver impressive production growth quarter after quarter, year after year, regardless of low price. Because investors and bankers love to see growth. How could total production nationwide be kept in check, if every producer claims to be growing exponentially?

    As long as they continue to have money to spend to grow relentlessly, they keep natural gas price low and keep their shale industry un-profitable. And that keeps foolish investors hooked up to the incredible growth story of the shale industry, not realizing that the entire industry is un-profitable under current gas prices. But that also keeps coal depressed. That's what happened.

    Now the good news is the sudden and free fall oil price collapse, which no one expects, destroys about $200B of lost oil revenue of the big oil/gas industry.

    Sentiment: Strong Buy

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