Santiago Morales | Becquerel Capital

Electric vehicles are an extremely powerful tool for reducing oil demand. This is so obvious when you use the same units. There is a ton of chemical energy in the oil we burn to move cars, but you only need a small fraction in electrical energy for EVs to do the same job.

@ericnuttall 😯

Are we overreacting? Goldman now estimating Gulf crude oil production is down 14.5MM Bbl/d, an astoundingly huge number (~1.5X the demand drop during COVID). Even with demand reduction/refinery run cuts of ~6MM Bbl/d, SPR releases of ~3.5MM Bbl/d, KSA/UAE workarounds of ~6MM Bbl/d, global inventories are still drawing by >6MM Bbl/d...~2X the size of the former "most anticipated oil supply glut in history"™️. The world will have lost over 1.1BN barrels even if the SoH opens tomorrow (ignore the supposed 20+ sea mines). Then to consider the potential for loss of productive capacity from forced shut-ins, the timeline to repair 80 damaged facilities (1/3 severe/very severe), and the refilling of SPRs (~0.3MM Bbl/d of new demand for the next 3 years or a 30% bump to baseline demand growth). Let's not forget about the twilight of US shale, the peaking of non-OPEC production, and the meagre 1.5MM Bbl/d of OPEC adjusted spare capacity. With all that said, to me a 2027 WTI strip of $72 looks mispriced, and we are buying companies that at $80WTI are trading at 17%+ FCF yields. Time will tell...

Control the electrons locally. Microgrids win the deployment race.

Buy a farm. Learn to garden. Get cows & chickens. Stock up on solar, batteries, and as much diesel as I could use over a 2-year period. Convert dollars to real things asap. Heck...I'm already doing all of those things, so no real change.

I sent this render to a developer this morning. He loved it. No architect. No 3D studio. Just a couple of prompts done before 9am. AI is getting better at showing what we see: self-sufficient communities where energy, water and food work as one system.

The use of primary energy on the vertical axis is an old trick by the fossil fuel industry to mislead people into thinking that one unit of fossils = one unit of renewables. In fact, one unit of primary energy for wind or solar electricity is the equivalent of three units of fossil fuels for electricity. Another trick is to pretend we need all those fossils if we switched to renewables. In fact, if we switch to renewables, 12% of the fossil fuel energy disappears because that is how much energy is used to mine-transport-refine fossil fuels+uranium for energy, and we wouldn't need to do that anymore A third trick is to pretend we need so much energy if we go to all electricity powered by renewables. In that case, because EVs use 75% less energy than gasoline/diesel vehicles, heat pumps use 75% less energy than combustion heating, etc., energy demand goes down another 42%. In sum, this plot illustrates the real story of where we are and where we need to go. The proper metric is end-use energy, not primary energy. web.stanford.edu/group/efmh/jac… and here's the paper web.stanford.edu/group/efmh/jac…

Energy independence isn't coming. It's the dust you kick up walking home.

Decades of data says the price of storage drops by 19% every time global production doubles. This isn't some marginal gain. It's an unstoppable force of nature You can’t out-compete math this aggressive. This "learning rate" is a one-way street to total electrification - because it's cheaper. As battery costs crater, EVs become cheaper than petrol cars, and grid storage makes solar/wind reliable 24/7 This feedback loop can't be stopped, however many fossil fuel wars Big Oil continues to initiate

Elon Musk: "We'll have a voltage transformer shortage in a year, followed by electricity shortage." Elon said this two years ago, and we are now seeing it play out as per the Bloomberg article below. Transformer prices have doubled from 2020 and lead times stretched from weeks to 1-2 years, so grid connection wait times are measured in years now. As a result, half of the data centers scheduled for 2026 have been canceled or delayed. So, compute will remain supply constrained for the foreseeable future and prices will remain elevated. Cloud providers will sell every bit of capacity they can bring online. Never been this bullish on hyperscalers. $AMZN $MSFT $ORCL $NBIS $CRWV

Interlinked complex systems ... become unstable. 1 year old great reading /listening from @MLiebreich at @MLCleaningUp about.bnef.com/blog/liebreich… cleaningup.live/cleaning-up-au…

Fertilizer prices have moved up to their highest levels since October 2022, rising 35% YoY. About a third of global fertilizer supply passes through the Strait of Hormuz. This will drive food price inflation higher in the coming weeks/months. Video: youtube.com/watch?v=2JSU5a…

@RayDalio Every diesel generator in the world is short Hormuz x.com/BecquerelC/sta…

Every community in the world still running on diesel generators is short Hormuz whether they know it or not. We're on the other side of that trade: building microgrids for non-interconnected communities in Baja, Mexico, displacing diesel with solar.

Solar will utterly dominate future electricity production

I'm working on a report about data center developers building their own power plants and this data shocked me: 48 GW of proposed data centers—roughly 33% of all planned capacity—now plan to skip the grid by building "behind-the-meter" projects. This is a very new trend. A little more than a year ago, virtually all data center developers planned to use the electric grid to power 100% of their projects. In December 2024, there was less than 2 GW of planned behind-the-meter data center capacity, according to our data center tracker at Cleanview. Then in 2025, developers announced roughly 40 projects that planned to skip the grid partially or entirely. Some of these projects will soon be home to America's largest fossil fuel power plants, like Homer City Energy Campus in PA—a proposed 4 GW+ natural gas plant that will send all of its power to an onsite data center. Other projects will use a combination of technologies—everything from solar, wind, batteries, and even nuclear. Natural gas is by far the most common, though. 72% of projects plan to use it. All projects are motivated by the same goal: getting their data center online as soon as possible. It can take as long as 7 years to connect a hyperscale data center to the grid in a place like Virginia. Building behind the meter power in a red state with lax regulations can get that time down to less than 2 years. But speed comes with a cost. Homer City's 4 GW project could soon become one of the largest single sources of carbon emissions in the country. At Cleanview we're tracking more than 30 projects that plan to use onsite gas with a combined 48 GW of capacity.

Central banks want to stretch the money and credit cycle to make it last for as long as it can because that is so much better than the alternative. So when the system of hard money and claims on hard money becomes too painfully constrictive, governments typically abandon it in favor of what is called “fiat money.” No hard money is involved in fiat systems; there is just paper money that the central bank can print without restriction. As a result, there is no risk that the central bank will have its stash of hard money drawn down and have to default on its promises to deliver it. Rather, the risk is that, freed from the constraints on the supply of tangible gold, silver, or some other hard asset, the people who control the printing presses (i.e., the central bankers working with the commercial bankers) will create ever more money and debt assets and liabilities in relation to the amount of goods and services being produced until the time comes when those holding the enormous amount of debt will try to turn it in for goods and services, which will have the same effect as a run on a bank and result in either debt defaults or the devaluation of money. #principleoftheday

“Amazon is turning to an Arizona mine that last year became the first new source of U.S. copper in more than a decade, to meet its data centers’ ravenous appetite for the industrial metal.”

.@HughButler35: “If you thought the world built a lot of renewables in the past few years, just wait for the next half of this decade. Solar is expected to double the past 5 years' growth. Incumbent analysts often get projections wrong.” 🌞🌞🌞 #alwaysbecharging

"Electricity is the ultimate perishable good" No longer. Batteries will change the solar harvest, in the same way silos and refrigeration changed the food harvest... but over years, not decades 🔋🍏 "Silos for Sunshine": a great new thoughtpiece💡 ember-energy.org/latest-insight…

An important chart from @washingtonpost on energy costs – generation has become cheaper, but the cost of delivering energy to consumers across the grid has more than doubled.