Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains • Hacker News Board

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#21

Post by cs702 » Sun, Jul 03, 2022, 7:14 PM UTC

nostrademons wrote: post #9

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Fascinating. I wonder if that conclusion holds if, instead of assets being shut down due to lack of demand, links are chopped off by war & geopolitical instability. This is another likely consequence of climate change and we're seeing it already with MidEast instability + Russia/Ukraine war. The lesson perhaps is that regions and individuals should do their best to disconnect their energy usage from the global fossil…

> Looks like the paper covers this, and counter-intuitively, most supply-shocks do not have far-reaching impacts to the global supply.

Thanks. Yes, I find that counterintuitive too. But note that in the publicly released data and model, the authors make highly simplifying assumptions about the limits of supply sources and edge capacities -- see lines 202-208 of the paper. In the real world, sources have limits at which you just can't get more flow at any cost, and edges have limits at which you can't transport more flow at any cost. I wonder how the responses to supply shocks would look if subject to hard limits on supply sources and edge capacities.

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#22

Post by samstave » Sun, Jul 03, 2022, 7:36 PM UTC

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Couple this with data from Import Yeti on the largest importers of ship-based containers during peak and average times.

Use that to determine that shipping costs across will go up and will affect the margins of retail during peak import seasons (like holiday prepping) and how that will affect their revenue predictions and ultimately stock value...

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#23

Post by [deleted] » Sun, Jul 03, 2022, 7:39 PM UTC

eggsmediumrare wrote: post #8

toomuchtodo wrote: post #4

Earlier quoted context omitted.

I’m reading the same book. I think what Peter misses with regards to energy is that roughly 40% of ocean shipments are moving fossil energy around [1]; if you move to renewables, a lot of shipping goes away. China currently generates more power from renewables than all of Europe [2], and the CCP seems to be aware of how foundational cheap, reliable energy is to their economic prospects. They have the will and governm…

That does appear to be a blindspot of his... For all that he likes to write about transformational technology and other factors that can transcend geography, he doesn't like to include stuff like green energy or even climate change in general in his model.

[deleted]

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#24

Post by XBR » Sun, Jul 03, 2022, 7:43 PM UTC

eggsmediumrare wrote: post #8

toomuchtodo wrote: post #4

Earlier quoted context omitted.

I’m reading the same book. I think what Peter misses with regards to energy is that roughly 40% of ocean shipments are moving fossil energy around [1]; if you move to renewables, a lot of shipping goes away. China currently generates more power from renewables than all of Europe [2], and the CCP seems to be aware of how foundational cheap, reliable energy is to their economic prospects. They have the will and governm…

That does appear to be a blindspot of his... For all that he likes to write about transformational technology and other factors that can transcend geography, he doesn't like to include stuff like green energy or even climate change in general in his model.

Peter Zeihan on limitations of green energy. https://youtu.be/LtH9rJAHbEA

Part 2 https://youtu.be/wuGp4LVMPVk

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#25

Post by cheaprentalyeti » Sun, Jul 03, 2022, 9:58 PM UTC

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Just wondering... do they actually understand that (for instance) coal hasn't been replaced by solar and wind but by solar + wind + natural gas peaking plants and pressure-points related to natural gas are actually under more stress? Or that the regulatory changes in the pipeline business actually make the swings in natural gas shipment more volatile?

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#26

Post by pawsforthought » Sun, Jul 03, 2022, 10:22 PM UTC

echelon wrote: post #18

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Does the field of economics use simulations like this at scale? It seems valuable to simulate all international trade, asset markets, supply and demand, employment, etc. to make predictions. It could also lead to better ideas to prevent or quell recessions by focusing attention on the correct levers.

I have to wonder about the real-world applicability of any such simulation, under the assumption that the systems in question are chaotic, and so extremely sensitive to initial conditions.

Do we end up needing to simulate the whole world? Because, ultimately these systems are in fact one, and not separate at all.

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#27

Post by pawsforthought » Sun, Jul 03, 2022, 10:26 PM UTC

jwatt wrote: post #5

On a related note, I've been getting increasingly worried that we're imminently and blindly walking into a human catastrophe due to our current energy policies. I'd be interested to hear about holes that anyone here might be able to poke in any of the red flags being raised by people like Anas-Alhajji[1], the Doomberg team[2] and Wil VanLoh[3]. 1. https://www.macrovoices.com/1087-macrovoices-328-dr-anas-alh... 2. htt…

Can you elaborate? We most surely are headed for human catastrophe, but which one and where are you referring to?

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#28

Post by pawsforthought » Sun, Jul 03, 2022, 10:31 PM UTC

eggsmediumrare wrote: post #8

toomuchtodo wrote: post #4

Earlier quoted context omitted.

I’m reading the same book. I think what Peter misses with regards to energy is that roughly 40% of ocean shipments are moving fossil energy around [1]; if you move to renewables, a lot of shipping goes away. China currently generates more power from renewables than all of Europe [2], and the CCP seems to be aware of how foundational cheap, reliable energy is to their economic prospects. They have the will and governm…

That does appear to be a blindspot of his... For all that he likes to write about transformational technology and other factors that can transcend geography, he doesn't like to include stuff like green energy or even climate change in general in his model.

Frankly, at this point, if anyone is prognosticating without reference to climate change, they’re indulging in alternate timelines that bear little relevance to the one we’re on.

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#29

Post by krashidov » Sun, Jul 03, 2022, 10:42 PM UTC

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Wouldn’t this just cause a perpetual yo-yo effect of the oil prices?

If there is a sudden large shortage wouldn’t that cause prices to spike? Could that be what we’re seeing today ?

Re: Asset-Level Transition Risk in the Global Coal, Oil, and Gas Supply Chains

#30

Post by ideamotor » Sun, Jul 03, 2022, 10:54 PM UTC

echelon wrote: post #18

cs702 wrote: post #2

This looks like fantastic work. I hadn't come across it before. Thank you for sharing it on HN. The authors simulate a network of ~6 million real-world assets used for extracting/processing/using fossil fuels, interconnected by ~16 million ground/maritime transportation flows. The simulations match actual fossil fuel flows at every location. The data and code have been open-sourced. The authors use the simulation to…

Does the field of economics use simulations like this at scale? It seems valuable to simulate all international trade, asset markets, supply and demand, employment, etc. to make predictions. It could also lead to better ideas to prevent or quell recessions by focusing attention on the correct levers.

Yes and this is exactly what the fed and governmental agencies attempt to model. Modeling such systems is very naive, but so is some cult-like belief in some first principles taught in Econ 101.