Converting Your Mineral and Oil Rights to Non-Depleting Assets
If you are considering converting your mineral and oil rights into non-depleting assets, the experts at The Mineral Auction are here to help. We have extensive experience connecting people who wish to sell their mineral rights to qualified buyers. The process is no-hassle and is extremely helpful for individuals like you. Contact us at (512) 698-2802, chat with us live on this site, or fill out a contact form to find out how we can help you today.
What Are Non-Depleting Assets?
Non-depleting assets are those that are not expendable. In the context of this discussion, we are referring to renewable energy-based assets. Renewable energy is energy that is generated from natural processes that are continuously replenished. This includes sunlight, geothermal heat, wind, tides, water, and various forms of biomass.
As oil is removed from your well, the well will eventually run dry. On the other hand, the ultraviolet energy from the sun, used by solar panels to create electricity is considered a non-deleting asset.
Why Are Non-Depleting Assets a Sound Investment?
Over recent decades, the world has shifted its focus to energy sources that are renewable. Scientific advancement and the various political driving forces have led this charge. According to a UN-backed report – Bloomberg New Energy Finance, “Global Trends in Renewable Energy Investment 2018,” political influences along with scientific advances have netted the addition of more solar capacity than coal, gas and nuclear plants combined. Since 2004, the world has invested $2.9 trillion in green sources. The outlook for renewables is ominous. Global energy demands continue to rise. This combined with an increased focus on renewable energy provides for attractive investment opportunities.
The scientific rationale for investing in renewables is simple. It centers around the fact that the original energy source used to make the renewable energy are themselves non-depleting. For example, the radiant energy from the sun, the kinetic energy from wind or hydro-dams are converted into electricity, which is then concentrated and stored in batteries. The source energy is clean, hugely abundant, and sustainable. It follows that the resulting energy is the same. Not only clean and renewable, but they are also available year-round and to everyone on earth. The confluence of these basic scientific principles, continued technological advances, political, and environmental factors all set the table for creating this new sector of investment opportunities. The truth is that alternative energy is far from being alternative. The world will continue to make the transition from depleting to non-depleting sources.
The Human Impact
The issues surrounding fossil fuels are numerous. Fossil fuels produce energy when they are burned. As they burn, they emit various hydrocarbons, which in turn produces irreversible global warming. The results include erratic, stronger and more frequent storms, drought, sea level rise, and eventually extinction. This “crisis” has become the technological turning point which is driving the market for renewable energies. As we inch closer to the tipping point of being able to save the earth from ourselves, we look to renewable energy sources as a way to wean ourselves of old energy. Worldwide, Germany, China, and India have been and continue to lead the way.
The Issues Surrounding Depleting Assets
Fossil fuels are derived from plant and animal fossils over millions of years. They include coal, natural gas, and oil. Aside from the pressing environmental issues, they are non-renewable because they take millions of years to form. This means that they are destined to deplete. Once depleted, we run out of fuel to burn.
This also applies to your oil-producing land. No matter how good a well is producing, it will eventually stop producing when it is depleted. Once depleted, the value is decreased accordingly.
Fossil fuels are also highly volatile investments. Their value varies as the commodities markets fluctuate. They are susceptible to price fluctuations and market manipulation. The reality is that oil and gas business is one of the world’s most volatile industries, fraught with uncertainty and subject to political changes in policy. Based on market conditions and political influences, mineral rights are a risky business.
The Potential For Non-Depleting Assets
To continue to meet human needs and support the global economy, a combination of demand reduction in fossil fuel utilization (through conservation and smart design), increased energy efficiency, and a rapid shift to clean energy sources is needed. Clean energy prices continue to decrease as technology advances. On the other hand, current rates of clean energy deployment are not high enough to prevent average global temperatures from crossing the 2 degrees Celsius threshold commonly accepted as the maximum temperature increase society can tolerate without deeply disruptive impacts. These dynamics make clear the enormous investment potential that presently exists for renewable energy – real assets such as wind and solar energy.
Are Non-Depleting, Renewable Assets Right For You?
You may be the personality type who not only seeks outstanding returns but to does so in a way that has positive environmental impacts. You may want to convert your assets to renewable energy. We are currently experiencing an “energy revolution.” Be it solar or wind energy, renewables are dominating research, politics, and industry as an answer to issues of fossil fuels.
Continued ownership of depleting assets represents a gamble given the associated problems. For various reasons, some owners decide to not part with their mineral rights under any circumstances. It is certainly possible that keeping them will continue to produce income; however, a confluence of economic, political and environmental forces make such investment riskier, while investment in green alternative energy sources has all the earmarks of being a stable and sound investment strategy; one which will only improve over time. The world is now locked in on renewable, non-depleting assets.
The energy system is transforming and doing so rapidly. Renewable energy capacity additions are exceeding fossil fuel generation investments by a widening margin. Between 2010 and 2017, wind and Solar capacity has grown at an average annual rate of 13% and 63% respectively. According Bloomberg report, by 2030, renewable energy sources will account for over 60% of new power capacity, and 65% of the $7.7 trillion in power investment. Given the anticipated spending spree in the sector, investors could see their holdings grow as a function of the increasing demand for alternative, non-depleting energy sources.
For the right investor and with the present day favorable prices of oil and crude, this might be an excellent time to convert your equity to renewable, non-depleting green sources. To learn more about how we work and how we can help you, contact The Mineral Auction at (512) 698-2802, fill out a contact form, or chat with us live.