Thanks for an interesting read and opening up an enlightening dialogue! Do you know if Exhibit 5 is on a national level? I would imagine Florida would have a much larger market for distributed solar than any other source of power and would look very different from the national mix as a result. Also, I think it’s import to consider that the EIA’s projections are a reflection of the choices NextEra and other utility companies make rather than a variable management considers when making production decisions. As the above comments already noted, those projections are driven by the government’s current and future energy policies and could end up being radically different than reality depending on what assumptions the EIA used. On a separate note, I’m wondering if some level of distributed power might actually be helpful for an energy company. Distribution networks seem expensive to maintain and it might be in NextEra’s interest to have rural residents produce power independently. If NextEra can also capture some of the solar installation and maintenance business, it could be in even better shape!
Thanks for an interesting read! It’s a topic that I’ve never given much thought to and I appreciate you shedding some light on it. I’m curious how you interpret “going on the offensive” for the USCG. I can’t imagine them using offensive cyber weapons but I believe there is absolutely room for the USCG to be more proactive. Building on Steve’s point about training employees on proper responses, I think the USCG could also incorporate “cyber inspections” into its routine checks on equipment and training. Last fall, I had the opportunity to observe a USCG inspection of a chemical tanker in the Port of Houston. While the USCG team diligently inspected everything from the fuel storage systems to ship logs to the crew’s knowledge of regulations, there wasn’t a point where they talked about computer networks or the crew’s understanding of cyber threats. This seems like a relatively simple change that could do a lot to ensure cyber training and regulations are reaching the lowest ranking crew members, especially considering the national and cultural diversity.
Great article, Tim! I also enjoyed the responses from Philip and Anton and agree that China will need both a better distribution network and grassroots-type support to build on recent progress and continue the move toward more sustainable energy supplies. On the question of fairness, I think China is actually making a lot of the decisions it is making for sound economic reasons rather than as a result of pressure from the international community. China’s tourism industry has grown significantly in the past decade and a large portion of that growth stems from China’s ability to improve air quality. As Anton pointed out, the marginal costs for solar and wind energy are very small and China can capture those benefits.
I’d also like to comment on your point about how Western countries historically benefited from cheap, dirty energy without the same international scrutiny that exists today. I think it’s also important to consider the context: until relatively recently, there weren’t cleaner alternatives to coal plants (economical or otherwise) and there wasn’t the same understanding of the effects of pollution on global climate change. It certainly doesn’t change the fact that many of the issues we face today were caused by Western countries but I wonder how the US and other developed countries might choose to generate power differently if they had to start over in today’s world.
Thanks for an interesting read! I agree with Steve’s point that it’s not BHP’s responsibility to regulate the global steel trade and that punitive measures, if used at all, are under the purview of national governments. The US actually has a longstanding record of using protectionist policies to insulate the domestic steel industry though and, even before Trump became President, already had 161 active tariffs against steel dumping (http://www.nwitimes.com/business/steel/u-s-steel-industry-has-lost-jobs-since/article_4ffd704a-1cdc-5eb9-82eb-0b858a369877.html). “Buy American” restrictions in particular have required recent government construction projects in Texas, California, Alabama, Colorado, and elsewhere to use steel produced in the US (http://www.globaltradealert.org/sector/411).
Thanks, Lili! Like Swan, I’m concerned about CaiNiao’s capacity with respect to Alibaba’s extremely large volumes. Singles Day generated 810 million orders but, according to the video, CaiNiao’s capacity is only 30 million packages per day. It’s not clear what Alibaba’s delivery capacity is independent of CaiNiao but it’s reasonable to believe there will be a considerable delivery backlog for some time after Singles Day. If daily sales continue to grow as your research suggests, Alibaba will have a difficult time fulfilling orders even with CaiNiao and will probably need to deviate from it’s asset light model to provide more fulfillment centers. Despite these challenges, I think CaiNiao is a novel use of big data analytics and will provide Alibaba a competitive advantage. It’s difficult to imagine JD competing effectively considering the market share and capital Alibaba already has.
Ben, this is a fascinating topic and I appreciate you sharing it. Like Austin, I’m a bit surprised that ULA has allowed its supply chain to remain so vulnerable over the past decade despite numerous indications of the deteriorating relationship between the US and Russia well before 2014. I would push back on one of Austin’s points however in that I think it was a series of tactical decisions rather than strategic decisions that led the US and ULA to this point. Despite spending more than $120 million in 1995 to develop domestic RD-180 production capability, Lockheed Martin and ULA were unable to compete with Russia’s $10 million-per-rocket production cost (https://www.thedailybeast.com/why-does-the-usa-depend-on-russian-rockets-to-get-us-into-space). The government decided it was better (and probably more politically expedient) to continue buying the cheaper rockets from Russia instead of pursuing expensive domestic alternatives. Even as recently as June of this year, the US Air Force awarded another $191 million to ULA to continue using the Atlas V with Russian-made RD-180 engines through 2019. With continued investment in ULA, I, like Rob, would expect the BE-4 to be the eventual replacement of the RD-180 and stave off threats of an Aerojet merger.
Hi Yin! Thanks for your feedback! I especially like your second point about the financing division and agree that it will have even more significant impacts than the physical supply chain concerns I focused on. It will be interesting to see how Ford responds to overwhelming pressure to move from Britain to Europe while still retaining a large share of the valuable British auto market.