I also think we probably mostly agree. But to be clear, as I understand it, experience curves for production aren’t based on money spent, they’re based on cumulative units of product ever made.
And you’re obviously right about capex today and in the near future. My central point is that capex for any application is something that we should expect to fall over time with iteration and scaling, because that’s what industries do. But we’ll never get started if opex is so high no one bothers.
And no, I meant methanol for marine fuel, because of the rising orders for dual-fueled ships, ports talking about becoming methanol hubs, and projects being announced to make methanol for this purpose.
experience curves for production aren’t based on money spent, they’re based on cumulative units of product ever made
Eh, I’ve seen both. It doesn’t really matter here, right?
And you’re obviously right about capex today and in the near future. My central point is that capex for any application is something that we should expect to fall over time with iteration and scaling, because that’s what industries do. But we’ll never get started if opex is so high no one bothers.
I don’t think that perspective makes sense if you consider the economy as a whole. Most opex is someone else’s capex, and capex depreciation is sort of opex. I don’t think raw material costs have become relatively more important over time vs processing costs, either.
And no, I meant methanol for marine fuel, because of the rising orders for dual-fueled ships, ports talking about becoming methanol hubs, and projects being announced to make methanol for this purpose.
Huh, that is a thing. But it’s a smaller thing than LNG fuel for ships, which makes sense, because LNG is economically better, with higher conversion cost but maybe half the fuel cost of methanol. I suspect methanol fuel is more of a cheap hedge against potential EU regulations. If it actually gets bought as fuel, it would probably be chinese methanol made from coal, and meanwhile they’d be proclaiming their readiness for e-fuels, lol.
Eh, I’ve seen both. It doesn’t really matter here, right?
True, but one is a much close proxy for time-spent-thinking-about-it and real-world-feedback-obtained than the other.
Most opex is someone else’s capex, and capex depreciation is sort of opex.
Also true, but if you’re starting from an assumption that something is infeasible because its total cost is high, and capex is the biggest but not overwhelmingly the biggest component of that, then dramatically reducing the price of the non-capex component reduces the problem from “This makes no economic sense whatsoever, and it isn’t something our industry can fix on its own anyway,” to “Anyone who manages to get capex way down can disrupt this.” It’s removing a systemic constraint on the value and usefulness of other innovations.
I also think we probably mostly agree. But to be clear, as I understand it, experience curves for production aren’t based on money spent, they’re based on cumulative units of product ever made.
And you’re obviously right about capex today and in the near future. My central point is that capex for any application is something that we should expect to fall over time with iteration and scaling, because that’s what industries do. But we’ll never get started if opex is so high no one bothers.
And no, I meant methanol for marine fuel, because of the rising orders for dual-fueled ships, ports talking about becoming methanol hubs, and projects being announced to make methanol for this purpose.
Eh, I’ve seen both. It doesn’t really matter here, right?
I don’t think that perspective makes sense if you consider the economy as a whole. Most opex is someone else’s capex, and capex depreciation is sort of opex. I don’t think raw material costs have become relatively more important over time vs processing costs, either.
Huh, that is a thing. But it’s a smaller thing than LNG fuel for ships, which makes sense, because LNG is economically better, with higher conversion cost but maybe half the fuel cost of methanol. I suspect methanol fuel is more of a cheap hedge against potential EU regulations. If it actually gets bought as fuel, it would probably be chinese methanol made from coal, and meanwhile they’d be proclaiming their readiness for e-fuels, lol.
True, but one is a much close proxy for time-spent-thinking-about-it and real-world-feedback-obtained than the other.
Also true, but if you’re starting from an assumption that something is infeasible because its total cost is high, and capex is the biggest but not overwhelmingly the biggest component of that, then dramatically reducing the price of the non-capex component reduces the problem from “This makes no economic sense whatsoever, and it isn’t something our industry can fix on its own anyway,” to “Anyone who manages to get capex way down can disrupt this.” It’s removing a systemic constraint on the value and usefulness of other innovations.