Going To Grid – Energy Transition Update

(A copy of this post is sent directly to all readers and subscribers of TerraJoule.us)

Dear Reader,

Thankyou for your interest in TerraJoule.us. If you’ve not had a chance to read the latest issue, The Energy Transition Portfolio, it’s available now. Single issue sales at Ganxy.com | Annual Subscription at Gumroad.com | And more detailed information at the TerraJoule.us website.

Model Portfolio: Up +10.0% Since Inception

The TerraJoule.us model portfolio, at mid month, is currently up +10% since inception (April 1, 2013). In anticipation of weaker market action, and seasonal weakness in oil and gas, equity exposure was greatly reduced on April 1, 2014. The cash level of the model portfolio currently sits at over 35%. The recent decline in global indices has taken a single percentage point off the portfolio’s high (+11%), seen at the end of March, 2014. Looking ahead, seasonal weakness from May through August will be a time of new accumulation of equity positions, in preparation for the next energy sector advance later this year.

Annual Subscription

All annual subscribers to TerraJoule.us, using the Gumroad platform, receive their latest issue automatically on the first of the calendar month. Subscribe today.

Mid-Month Data Update

As a courtesy to you, the TerraJoule.us Mid-Month Data Update takes a look the progress of energy transition, as the world continues to re-weight its energy consumption from liquid fossil fuels to the powergrid.

As explained in the April 2014 issue of TerraJoule.us, The Energy Transition Portfolio, the secular shift of global energy demand to electricity has profound implications for investment, over the next decade. Power generation has fully recovered from the 2008-2009 global financial crisis, and is running at rates previously associated with normal, global growth. Oil production, on the other hand, remains stagnant. In 2013, global crude oil production advanced by an insignificant 0.22%.

We mark the start of our current energy transition to the year 2005. That is the crossover year when global oil production growth faltered, and the rise of industrial Asia set the course for a global economy tied to the powergrid. In every year since 2005, global electricity generation has significantly outpaced global oil production. Notable years are 2006-2007, when global oil production actually fell, as global power generation advanced by 3.8% and 4.69% respectively. Note also the big, global recovery year of 2010: while oil production rose (finally) to meet recovering oil demand, global power generation soared by 6.36%.

2013 was yet another, strong year of global electricity generation growth as China power demand, contrary to market perceptions, rebounded. As emerging markets are now recovering, we expect 2014 will provide yet another high-contrast year  between electricity generation and oil production. Indeed, we may even seen global oil production fall, if only a little, by the time this year has completed. | see: Global Growth Rates: Electricity Generation vs Oil Production 2005-13. (click on image to enlarge)

Global Growth Rates- Electricity Generation vs Oil Production 2005-2013

Next Issue of TerraJoule.us

The next issue of TerraJoule.us will be published Thursday May 1, 2014 and will offer an update to the impending repricing of oil. For background, please see the September, 2013 issue: Road Map to the Next Repricing of Oil.

Thanks so much for reading TerraJoule.us, and we hope to see you again next month.


Gregor Macdonald
Editor, of TerraJoule.us Monthly ebook
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