Lots of good commentaries lost in the mire of taking sides:
1. Coal-fired power stations take a long time to start and to shut down. Actually I lived next to nuclear and that shuts down very quickly but takes a long process to get back up and running. So really if renewables really wind and solar at this stage then baseload is a problem. There have been limitations put on a variety of renewable producers because of voltage issues
https://reneweconomy.com.au/aemo-slashes-output-of-five-big-solar-farms-by-half-due-to-voltage-issues-42232/2. Renewables require something else to make them reliable. We have the water pumping solutions, we have batteries (but very expensive), we have coal-fired power stations. The reality is that a baseload power station actually needs to quickly insert itself and carry the load drop when renewables drop out. The reality is that at night the usage also drops so a mix of all of these do a great job but what used to be a quick peaking power station which used to be well suited to Gas may well actually get a slightly longer working period within a new solution. The reality is that baseload provided by coal has to shrink dramatically. The role of Nuclear is uncertain - especially in Australia as the population has been brainwashed that it is very unsafe. Batteries are probably decades away from being a cost-effective storage option. Right now they seem to stabilise the grid very well. They can provide for a known peak requirement like the time we all prepare dinner but they cannot provide more than its stored.
3. We should probably separate the old terms of O&G - I think they are not two parts of the same solution. I don't foresee a lot of OIL burning boilers or power stations being run but I do see a lot of Gas power stations providing the gap between until there is a demand drop. I don't see a reduction in rooftop solar at all and if anything I think the peak and valleys will get worse. Yes, you can create one from the other but really that is probably less necessary. It's clear that gas has less CO2 emissions than coal or gasoline.
https://www.eia.gov/tools/faqs/faq.php?id=73&t=114. WPL and its infrastructure units were built earlier yet it is still relatively new and cost a lot less than it would cost today. It's primarily a gas play for me. So I am less concerned by oil but I see Oil being needed for at least the next 2 decades but a declining need. The service station units will change over time as I suspect they will have to recharge batteries and we will probably have to wait 15 to 20 minutes to do that. So they will change how we interact.
5. If I am correct then the big drive will be natural gas to power the bridge between solar and night usage. To power, any gap needed on a much lower baseload production needed. If that is so then in effect this starts to reduce the need for slow to react baseload coal.
The originating poster was trying and is correct to a degree in pointing out that WPL has not performed as well as say STO. since January 2018. What isn't taken is to realise that these stocks have a long lead time for projects to feed into profits, are affected by exploration costs and results. So the January 2018 is an unfair point in time as STO had dropped a lot from its halcyon days and was in a recovery place. If you take both stocks over 10 years today STO still beats WPL because it is only down by 26% vs WPL at 32%. So that would suggest that you should not invest in either.
I am investing because I think we will start to see the transition from baseload slow to react coal and we will see more gas power stations and that the world will start to use more natural gas. Thus WPL will start to see a better return on its processing and infrastructure units.
I do agree that maybe they should stop seeing themselves as needing more OIL and concentrate on Gas and let the condensate give them some oil. The thinking at the top may still think its an O&G play.
I also think that the shale fields will start becoming more difficult to fund as they require more wells, more fracing and have a sharp decline as I understand it. I don't know who is making money there and I am sure that BHP regrets its entry into the shale oil market.
https://www.abc.net.au/news/2017-08-23/bhp-billion-dollar-shale-oil-blunder/8832698I am not an oil fundie but I see the underperformance of WPL as an issue with the competitive gas market rather than it being an oil company. I also see gas as allowing all of us to buy into a transition period without it being all renewables or all coal. Its a building block for renewables and makes them viable earlier. We cannot ignore them at a moment in time last year they produced 50% of our power needs. Okay, it was only for a moment.
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