The Impact of Oil Prices on LENR

It’s almost impossible not to notice the currently ongoing precipitous drop in oil prices. Headlines daily are talk about the effect of oil’s drop on consumer spending, the stock market, Russia, North American oil production, OPEC countries, etc. Even if you don’t watch the news, the signs we see at our local filling stations tell us that something dramatic is going on.

Whether the potential of LENR has anything to do with the has been debated here and elsewhere before — but that is not my focus here. I am wondering if the emergence of LENR as an alternative energy technology could be hindered if fossil fuel prices are low.

Andrea Rossi was asked on the Journal of Nuclear Physics about this today:

Dear Andrea,
How do you think, if the oil prices will continue to fall as fast as they do, will your technology still be competitive when it is finally released, considering the much cheaper oil, gas, and electricity and the high price of 1MW plant 1.5M USD?

***********************

Andrea Rossi
December 16th, 2014 at 7:24 AM
Dima Redko:
The history of oil prices is a roller coaster…I have not the cristal ball.
The price of the E-Cat will be adjusted to the market mas mass production, in due time.
Warm Regards,
A.R.

A very important question is going to be — how much does an E-Cat plant cost? As mentioned by Dima Redko the price tag Andrea Rossi has attached to an old-style 1 MW E-Cat plant is $1.5 million. But we have to remember that this was for a basically hand-made plant, before Industrial Heat took the reins of the E-Cat. And I am not sure if Rossi ever sold a plant at that price. In any case, in his reply above, it seems that Rossi expects that price of an E-Cat to be adjusted downwards when IH starts to mass produce these plants.

But even if the cost of an E-Cat plant is cut in half, or even a fourth — could an E-Cat industrial heating plant be competitive with a natural gas, or oil heating system if fossil fuel prices remain low? How much flexibility will Industrial Heat in pricing their plants in order to compete with established manufacturers?

In terms of the cost of fuel, I don’t think there is any likelihood that oil or gas will be cheaper than a small charge of nickel powder with some other additives that lasts for six months or more. But there is more to an E-Cat plant than the fuel and the reactors. Rossi has said that the bulk of the E-Cat plant is made up of heat exchange systems along with the computerized control systems.

At this point, there is a great deal we don’t know about the E-Cat and Industrial Heat’s business plans — so we can only speculate about a lot of this. But I do think that in general terms, when energy prices have fallen so far there will be a diminished incentive for most businesses to start shopping around for alternative energy systems; there would have to be a clear financial advantage for making the switch.

Of course, as Rossi mentions above, the energy markets have been tremendously volatile over the years, so we may not be in for a prolonged era of cheap fossil fuels, but the current trends do set up a headwind that LENR and other alternative energy sources will need to fight against in their efforts to be competitive.

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