By on July 14, 2017

oil

Even though electric vehicles still only account for a sliver of the global market, Big Oil is beginning to take them seriously as a long-term threat to the industry. While preserving a finite resource is still probably the way to go, oil companies are accustomed to making money and have now begun revising their forecasts to account for accelerated EV adoption.

Companies like Exxon Mobil and BP are ratcheting up their outlooks for the technology, anticipating slowing oil demand, while OPEC has quintupled its forecast for sales of EVs in the coming years.  

Those vehicles should account for a reduced oil demand of roughly 8 million annual barrels by 2040. According to Bloomberg, that’s more than the current combined production of Iran and Iraq.

“The number of EVs on the road will have major implications for automakers, oil companies, electric utilities and others,” Colin McKerracher, head of advanced-transport analysis at Bloomberg New Energy Finance, wrote to clients. “There is significant disagreement on how fast adoption will be, and views are changing quickly.”

So quickly, in fact, that OPEC now believes EVs will account for almost a quarter of the global market in under 24 years. That’s 266 million vehicles, up from a scant 46 million it anticipated just a year ago.

If you’re wondering what’s causing the shifting projections from oil companies, it’s the newly concentrated effort from major manufacturers to incorporate electrification into their fleets.

Tesla is beginning production of the more-mainstream Model 3 this summer, Volvo is planning to place an electric motor in all of its vehicles within two years, Mercedes is shifting toward mild hybrids, Volkswagen is promising to be a cleaner, greener company by bringing more electrics to market, and nearly every company is coming out with a new EV as they simultaneously scale down the size of their internal combustion engines. That’s in addition to a growing network of charging stations and governments pushing for more aggressive emission regulations. It’s all working toward an increasingly electric and less oil-driven future.

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87 Comments on “Electric Cars Are Officially Keeping the Oil Industry up at Night...”


  • avatar
    Hummer

    You guys are really pushing out some less than newsworthy articles lately no? Wasn’t there another Takata recall the other day ago?

    So long as Tesla and every other automaker keeps filling their vehicles with plastic for the bumpers, dash, etc. So long as the world keeps buying cheap plastic crap – I truly doubt any oil exec cares.

    • 0 avatar
      PrincipalDan

      And most of that electrical power is coming from natural gas which the “oil companies” (Read: Energy Firms) are up to their eyeballs in the market.

      • 0 avatar
        Hummer

        I feel that there may actually be people that would respond to the question “Where does your electricity come from” with the answer “The outlet”. An old joke is a horrible reality today.

        • 0 avatar
          jalop1991

          And I’ve no doubt there are wacko snowflakes who would ban hunting because it’s harmful to animals and tell you to go get your food at the grocery store instead…

          • 0 avatar
            stuki

            Last fall, I saved two such fools from a lifetime of living in error, by taking them elk hunting. She even was a vegetarian prior, yet is now OK with eating meat, as long as the animal got to live properly in freedom, up until the moment it got humanely culled. And he’s supposedly hunting deer this season….

          • 0 avatar
            carguy67

            You having ‘no doubt’ doesn’t make anything a reality. If there were such ‘wacko snowflakes’ they’d be in California and I’ve heard of no such individuals, much less movements, here. In fact, one of our poster boys–Mark Zuckerberg–supposedly hunts, slays and dresses his own meat.

            Getting a hunting license in California is no more difficult now than it was when I got mine over 50 years ago.

          • 0 avatar
            9Exponent

            It’s not your guns; it’s your stupidity we object to.

      • 0 avatar
        indi500fan

        My electric rates (and monthly bill) continue to climb, while gasoline prices are below 2 bucks a gallon. How many of these ev buyers think they are gonna get free juice from Tesla, work, school, or wherever?

        • 0 avatar
          markogts

          And how many miles you do with those two dollars? At 15c$/kWh you can buy 12 kWh which will be enough for 40 to 50 miles. Now add two factors: cost of renewable energy is continuously falling, and there are many places where fuel costs way more, like 6-8$/gal. Even in the US it was not long ago that gasoline was at 4$/gal. Would you bet that it won’t happen again?

      • 0 avatar
        Lou_BC

        Well……. I read a story about solar panels on roof tops and the biggest lobby group against them: conventional electrical companies.

        “The utility companies say that rules letting homeowners sell excess power back to the grid — a process known as net metering — are unfair to those who do not want or can’t afford their own solar installations. They also argue that renewable energy could be hurting traditional sources, including oil, coal, and natural gas.”

        Isn’t that the whole f–king point?

    • 0 avatar
      thelaine

      I think this electric vehicle hype is not reality-based. It is always dependent on the next big technology breakthrough. Meanwhile, oil is becoming more and more abundant. The real tech breakthroughs have already occurred – in petroleum extraction. Gasoline powered cars are way more practical for the vast majority of people.

      • 0 avatar
        derekson

        The best and most rational usage of electric technology is the hybrid, either plugin or conventional depending on use case. This will remain true until/unless some massive advance in battery chemistry occurs to the point where a 300+ mile range doesn’t require 1000+ pounds of additional battery dead weight being dragged around 100% of the time. And even then you have the fact that oil is and seems to be remaining relatively cheap while electricity isn’t getting any cheaper and more BEVs only make this more unbalanced.

        BEVs only make more sense if you are ideologically wedded to them.

        • 0 avatar
          Wheatridger

          Agreed, and that’s why I signed for a plug-in hybrid just yesterday. Twenty miles of all-electric range is sufficient when you also have an ICE hybrid powertrain to complete your journey. Twenty miles isn’t far, but every longer trip begins with those 20 miles. And the high-voltage battery, just 8 KWh, is relatively small and quick to recharge, about 4 hours plus on 110v house current. Call it a halfway step to electrification, that’s fine, because the overall EV support infrastructure is far less than halfway complete.

        • 0 avatar
          stuki

          +1.

          Once the hypeathlon dies on the wine from running out of other people’s money, plug in hybrids with sufficient range for most people’s “day to day” use, will come back to the fore as the car of the near to mid future. In the far, far, far future, Elon’s Mars Rover may be electric or fuel cell, though.

        • 0 avatar
          JDG1980

          I think the upcoming hybrid F-150 will have a bigger impact than a lot of people think. Everyone loves half-ton pickups (they’re the best-selling vehicles in America by far), and the opportunity to drive an F-150 and still get ~30 MPG will be too much for many buyers to pass up. The electric motor should give plenty of torque for towing, and fleet buyers will be happy with the ability (announced by Ford) to run tools off the built-in battery and motor without needing a separate generator.

          • 0 avatar
            carguy67

            Can’t wait for the ‘Real People, Not Actors’ commercials: ‘When you drop that half-ton of cinder blocks into the aluminum bed from 20 feet what happens to the batteries! Think of the batteries!’

          • 0 avatar
            stuki

            Batteries provide “plenty of torque” only for about a stoplight drag’s worth, before running empty. Perfect for spec sheet racing Teslas, but towing requires “max” output steadily for long periods of time. Hence, denser energy storage than batteries provide. And plenty of cooling. A hybrid truck, would lean on the ICE for towing, and on it’s electrics for stop and go city usage, where idling a giant tow engine, is maximally inefficient.

      • 0 avatar
        markogts

        Sorry but no, oil is not becoming “more abundant”. What happened is that the spike in oil prices of the last crisis made some expensive techniques (fracking, deepwater, tar sands, arctic) competitive for a while. This caused a glut (fueled aldo by the reaction of the Saudis) which is now hampering new discoveries and investment. It’s quite easy to forecast another cycle, unless demand falls way faster than the offering.

        https://www.bloomberg.com/news/articles/2016-08-29/oil-discoveries-at-a-70-year-low-signal-a-supply-shortfall-ahead

        • 0 avatar
          thelaine

          Nope. Fracking and horizontal drilling keep getting cheaper and recoverable reserves keep on rising. The more people look, the more they find. We are awash in the stuff. It is not scarce and it is not declining. It is growing. Peak oil was an even bigger fraud than catastrophic man made global warming.

    • 0 avatar
      VW4motion

      Political articles brings out more emotion in turn increases clicks on site.
      Oil industry issues reminds me of the tobacco industry issues of the 80’s and 90’s . They will take a hit for a certain portion of the population that is pro earth and human. Other end of the spectrum we have rolling coal individuals that are similar to the pro tobacco folk. It all washes out in the end. Technologies will change as we evolve as humans.

      • 0 avatar
        thelaine

        Without the evil, greedy oil industry, you would not be sitting at a computer or on your phone voicing your opinion. You would be in a log cabin burning wood and dying from an infection. Oil enabled the creation of the modern world. Hug an oil tycoon today.

        • 0 avatar
          VW4motion

          Great example of my point. Political issues brings out emotion over critically thinking. This is why TTAC puts out these posts.

          • 0 avatar
            thelaine

            You should look in the mirror.

          • 0 avatar
            thelaine

            “A certain portion of the population that is pro earth and human?” vs “Rolling coal and and pro-tobacco?” Critical thinking or gross emotionally based good vs evil stereotypes? You are posting here because of emotion.

          • 0 avatar
            VW4motion

            Go back and look at historical medical writings, laws, and political philosophy or opinions. For the most part people have evolved from those writings, laws, and opinions.
            After learning that children in China have a 40% increase in cancer due to non-scrubbed coal plants. I would tend to think most educated people have the opinion that we should not have coal power plants without filtering waste coming from those plants. This was not even thought of 100 years ago. People didn’t have the educational background or research on these power plants. People evolve with education. This is not so different from the combustion engine.

            1000 years from now some of your posts could be used to show how ignorant some people were about technology and science.

          • 0 avatar
            thelaine

            The same applies to your ignorance of economics, unfortunately. Who is advocating unscrubbed coal plants? Nevertheless, have a look at plans for hundreds of new coal plants around the world. Economics, bro. Poverty sucks.

          • 0 avatar
            VW4motion

            I actually never gave my opinion about economics. Just pointing out that education helps evolve change. The oil industry will have to evolve to keep up with these changes or some will fall. Look at history over the past 200 years. Silo thinking equals sedentary thinking.

          • 0 avatar
            thelaine

            Energy technology and economics are inextricably linked. Ignoring this fact is a great example of silo thinking. The fact that education advances technology is not a profound insight.

  • avatar
    zip89123

    Electricity is so prohibitively expensive in most places that the oil industry will never have to worry. The Prius otoh has a major effect on oil consumption.

    • 0 avatar
      markogts

      Where I live I pay 0,20€ per 1 kWh and I drive 5km. Fuel costs 1,3€/l and I drive 15 km with one liter. Do the math.

      • 0 avatar
        james2k

        Maths may not be their strong suit.

      • 0 avatar
        Matt Foley

        Where I live, I can make a 1000-mile road trip in my good ol’ dino-burner with three fuel stops, each taking less than ten minutes. The same trip in a Tesla Model S would require more than four hours of recharging. In a Nissan Leaf, it would take four overnight charges. Do the math.

      • 0 avatar
        thelaine

        So, no need for subsidies then. At least we can agree on that, since the math is so favorable. Everyone can just buy what they want without getting ensnared by the mandate and subsidy overlords. Sounds perfect.

  • avatar
    brandloyalty

    Why on earth would the oil industry execs open their stupid yaps before consulting with ttac’s w&d?

  • avatar
    TW5

    Yeah, I’m not sure oil companies are worried about replacing gasoline automobiles with natural-gas powerplants and electric cars. The glut of natural gas is actually driving OPEC and supermajors nuts. That’s why they are overplaying the importance of EV’s, despite lithium and rare-earth metal supply issues. They want to raise the price of natural gas by stimulating speculation. Governments are also getting in on the action by declaring they will outlaw ICE’s by 2040 or whatever. This is all part of coordinated geopolitical actions in the energy markets, particularly the world’s desire to replace Russian natural gas in Western Europe.

    If you know how to speculate in the natural gas market, now could be the time.

    • 0 avatar
      derekson

      TIL Russia isn’t part of the World.

      But seriously this analysis is spot on.

    • 0 avatar
      joeaverage

      What do you mean rare-earth metals? Tesla says their EV has no rare earths. I would assume other EVs are similar or could be.

      https://forums.tesla.com/forum/forums/no-rare-earth-metals-model-s

      • 0 avatar
        markogts

        Well, even lithium availability is not an issue, since it only represents 7% of battery weight. At the most, there may be bottlenecks with manganese, nickel, copper and cobalt, but then again, to reach the limits of these metals would mean that we’ve already come a long way in sustainable transportation.

        https://www.greentechmedia.com/articles/read/Why-Lithium-Isnt-the-Big-Worry-for-Li-ion

    • 0 avatar
      thelaine

      My understanding is that the feds hand you 7,500 bucks and many states kick in a couple grand more to induce you to buy an electric car, but only a tiny percentage of people take advantage. All the electro-advocates arguments ring a bit hollow in light of these facts. These people are basically subsidized hobbyists. We might as well subsidize jet packs. Actually, that would be awesome…if you had a 3 minute commute.

      • 0 avatar
        markogts

        Well no, everybody takes advantage in terms of less foreign oil reliance and less pollution. They are called “external savings” as opposed to “external costs”.

      • 0 avatar
        TW5

        @ thelaine

        I wish it were that simple, but the rules are incredibly complicated. The subsidy is $7,500 per year, but it’s not refundable so you’ve got to earn at least $80,000 dollars for a married household. In some households it will be much higher because they have other credits like child tax credit.

        Furthermore, the credit phases out after a manufacturer reaches production of 200,000 qualifying units, measured cumulatively from Dec. 31, 2009. Department of Energy website has more information about the allowable credit by vehicle. So far, none of the manufacturers have sold enough EV’s to trigger phase out, but it will arrive eventually.

        Unfortunately, the rules are also quite complicated for plugin hybrids because not all of them qualify for maximum credit. For instance the Audi A3 E-tron only qualifies for $4,502 of credit. The BMW i3 w/ range extender gets the full $7,500 credit. Ford CMax Energi earns $4,007 credit. The lowest credit (surprisingly) belongs to the previous gen Toyota Prius plug-in (I guess a few are still unsold), which only gets $2,500.

        In summary, the credits are a complete mess, and I don’t blame people for avoiding this nightmarish spiderweb of regulations.

        • 0 avatar
          thelaine

          Oy. Thank you for the education TDub.

        • 0 avatar
          Wheatridger

          It took me just a few websites to find my new C-Max Energi qualifies for $9,007 combined credits here in Colorado. Then a call to my tax accountant to confirm this. Not so difficult. With these incentives, I can’t afford to buy anything else. Takes care of 1/3 the sticker of a very well-equipped car.

        • 0 avatar
          carguy67

          “… The subsidy is $7,500 per year …”

          Forever? I thought it was a one-time tax credit, which would have to be realized in the calendar year the car was purchased?

      • 0 avatar
        mcs

        @thelaine: “My understanding is that”

        Your understanding? B.S. Show us some hard information.

      • 0 avatar
        VW4motion

        Speaking of subsidies: time to wake up to the truth.
        “According to Oil Change International calculations and data from the Center for Responsive Politics, the oil and gas industry spent more than $247 million on congressional campaigns and lobbying during the last election cycle alone, while receiving roughly $35 billion in public finance and federal subsidies. That amounts to a 14,000% return on investment.”

        • 0 avatar
          thelaine

          Agreed. Eliminate subsidies, mandates, and welfare. Make government small, so it does not have the power to distort markets after politcians are bribed. On the other hand, sleazy, wasteful subsidies for one industry are a weak justification for yet more sleazy, wasteful subsidies. Make government small and regulation minimal. Let markets work.

        • 0 avatar
          FreedMike

          Bingo. Funny how folks of a certain political bent never get their undies in a wad about that. Why? Look at the party that the oil companies overwhelmingly support. There’s your answer.

          People need to stop thinking in terms of what’s going to help *my party* screw *the other party* and start thinking in terms of what’s good for the country. And developing new forms of energy is good for the country. Good for the whole f**cking world as well.

          • 0 avatar
            TW5

            @FreedMike

            Identifying certain industries according to political schema the act of partisan hackery. Unfortunately, this behavior is common place in one particular political party that also judges people by their race, sexual orientation, income level, profession, etc.

            It’s particularly sad because their evaluations are frequently baseless idiocy. The O&G industry is producing the natural gas that is replacing coal. It’s supplying the plastics that fuel advancements in other industries. It’s increasing US exports, now that the export ban has been lifted.

            When John D Rockefeller and Standard Oil are involved in another anti-trust lawsuit, we’ll come find you.

  • avatar
    craiger

    This TTAC piece says 8 million annual barrels, but the referenced Bloomberg article says “The London-based researcher expects those cars to reduce oil demand 8 million barrels by 2040, more than the current combined production of Iran and Iraq.”

    Iran + Iraq produce a little under 9 million barrels per day, which is about 10% of the world’s production. So, I’m guessing that the Bloomberg piece meant “8 million barrels per day.”

    8 million barrels in a year’s time is nothing.

  • avatar
    brandloyalty

    Oil companies are investing in sustainable energy. They will be fine. That’s because they’re smarter than the w&d. Let’s see who is holding the stranded assets when the music stops.

  • avatar
    Joss

    Meh. Isn’t it about time we the little people screwed around the big ones? keep them on their toes guessing what type of gas or Musk-breaking pedal we’re gonna press..?

    You can be sure they’ll have all their manipulations and skulduggery at work in their best interests.

    Lets hope some of it backfires and they keep VW execs company in retirement.

  • avatar
    silentsod

    One might say it’s causing them to burn the midnight oil.

  • avatar
    golden2husky

    The energy companies need to diversify. Consider the state of voice communication today. Once the means of communication, it has been eclipsed, just the way the phone eclipsed the telegraph. Instead of crying about it the big com companies are now internet providers. Energy companies and utilities should be the ones who provide solar cells, wind generators, etc. instead of expending political capital to try to kill the industry. They will fail in their efforts and instead of being part of the next wave of technology, they will find themselves marginalized by it. Wake up!!!

  • avatar
    Davekaybsc

    The way out, as I see it, is a *massive* investment in liquid fluoride thorium reactors replacing LWRs across the board, and eliminating coal fired plants for good. The LFTRs can of course be augmented with wind and solar farms wherever applicable. The existing energy grid in many parts of the world is simply ill equipped to handle a huge increase in demand that will be the result of BEVs replacing ICE on a large scale.

    Running out of gas isn’t the problem, we keep hearing about “peak oil” and it keeps not happening. The problem is anyone who thinks that you can solve climate change by replacing existing cars with a bunch of Bolts and Teslas. And just how are you going to do that exactly? Coal? You haven’t solved anything. Fracked natural gas? Now you have a massive methane problem, in addition to your CO2 problem. You haven’t solved anything.

    Nuclear is the only way out, and instead of continuing to idiotically waste 95% of incredibly rare uranium that then becomes toxic waste for 10s of thousands of years, you could burn 95% of incredibly common thorium, that becomes inert after about 300 years.

    Thorium could be creating hydrogen for HFCVs as a replacement for gasoline for long distance driving where BEVs simply do not work, at least not yet. Thorium could be powering de-sal plants to help deal with water shortages, among many other uses. Or, we can keep being stupid.

    • 0 avatar
      markogts

      http://www.businessinsider.com/map-shows-solar-panels-to-power-the-earth-2015-9

      • 0 avatar
        thelaine

        Heh. We could also power the world by hiring people to run on treadmills, but at what cost? At least we would also have power at night. The good news for solar companies are fat government subsidies. Nice racket, if you can work it.

    • 0 avatar
      thelaine

      Thorium reactors are extraordinarily promising. The bottom line is that there never was and never needs to be an energy shortage. There are plenty of options if the gift of cheap and abundant hydrocarbons ever stops giving. They have been responsible for an revolutionary improvement in living standards, unimaginable at the time they were first commercialized. That is why developing nations talk a PC game, but build coal plants. Hundreds more will soon be built in nations like Pakistan, India and China. They are doing it because they don’t like being poor. Hydrocarbons = wealth. There is no economically competitive substitute. Thank your lucky stars we’ve got so damned much of it. Hug a fracker today.

  • avatar
    stingray65

    If electric cars get too common the tax collectors will definitely start taxing the juice you put in your Tesla or Bolt, which will significantly reduce EV operating cost advantages. Remember in the US about 25% of what you pay at the gas pump is tax, while in Europe it is about 80% tax, so plenty of tax can potentially be added to car electricity. Renewable energy mandates and subsidies will also be increasing the price of electricity, and without the solar and wind subsidies that alternative in many places is coal generate electricity that negates all EV emission advantages. Germany and California pay about twice the price of most surrounding areas due to their heavily subsidized solar and wind, and this assumes that heavy renewables will be reliable – South Australia has regular blackouts due to their heavy use of unreliable renewables. So you can’t assume that electricity for your future Tesla or Bolt will be clean, cheap and readily available.

    • 0 avatar
      Marcin Laszuk

      Exactly. I find it hard to believe that there are people who still think that driving an EV will be much cheaper once they become ubiquitous than driving an ICE car is now. Even discounting the issues of renewables and drastically increased demand for electricity in such a case, it is obvious that the governments will find a way to tax electricity for car use in such a way that the average cost of driving will be set around the maximum that the population will bear without cutting back their spending, meaning somewhat higher than it is now.
      They just won’t let you get too prosperous.

  • avatar
    shaker

    I’m glad I can come here to read about everything that’s wrong with EV’s.

    But, I’ll keep my Volt anyway.

    • 0 avatar
      stingray65

      Nothing wrong with the Volt or most other hybrids and EVs as they are mostly well engineered, nice driving vehicles. The EV problem for most commenters is that the cars only exist because of heavy subsidies that they object paying for as taxpayers or shareholders. GM didn’t develop the Volt for any reason other than to appease regulators and positive PR from the tree-hugger media, and has lost hundreds of millions of dollars on this investment that might have otherwise been spent on shareholder dividends, or better pickups and crossovers that actually do earn profits. Many commenters also object to the simplistic viewpoints that suggest the world can quickly convert from fossil fuels to renewables at no cost to the environment or the economy. If solar generated electricity really was cheaper and cleaner than coal or natural gas, if seems logical that the world would have made the conversion decades ago, but the reality is all renewables need near 100% backup with conventional power-plants unless you are prepared to go days without electricity when the wind stops blowing (which it typically does on the hottest and coldest days). Thus renewables are just like your Volt – they need two costly powerplants to provide reliable output, which makes them more expensive and more resource intensive. If you are prepared to pay full-price for your Volt I have no problem, but I do have a problem when your preference takes money out of my pocket.

      • 0 avatar
        thelaine

        This,exactly.

      • 0 avatar
        shaker

        If you take advantage of the mortgage interest tax deduction, I’m helping you pay for your house.

        I’m too poor to own a house @ 250,000 where I could itemize, yet some of my taxes go to people who can afford that.

        All of the problems with renewables can be solved with existing technology – the FF industry actively discourages innovation wherever possible by political means. Even Exxon is bragging about biofuels that it has no intention of selling – they’re blowing hydrocarbon smoke up people’s butts.

        • 0 avatar
          thelaine

          That is not a justification for this subsidy. That is a rationalization of theft. Everyone else is getting theirs, so why shouldn’t I get mine? That is lame and childish. The subsidy should stand or fall on its own merits. Otherwise, any subsidy whatsoever, including subsidies for tobacco and soft drinks, could be justified by the same argument.

          Let’s join together and oppose big government and the special privileges, graft, subsidies and special tax breaks it hands out to the favored. Allow the markets to price choices and people the freedom to make them.

          • 0 avatar
            shaker

            Apparently, we will continue to talk past each other on this subject.

          • 0 avatar
            thelaine

            All subjects, Shaker, as far as I can tell.

          • 0 avatar
            FreedMike

            “Allow the markets to price choices and people the freedom to make them.”

            You’re right, but what you’re overlooking is that “the market” isn’t just the United States of America. “The market” is the whole planet. And if we let “the market” dictate where moneymaking technology like EV is developed, it may well be developed somewhere else. That means the wealth, jobs (and tax revenues) that come with it end up in someone else’s pocket.

            Subsidies don’t happen because of ideology. They happen because of money. We want the technology made here, and we want to profit by it. It’s exactly the reason why we subsidized computers back in the ’50s and ’60s (and, if fact, gave tax credits to people who bought PCs in the early ’80s, just like we give out EV credits today), and tech like the Internet after that. That has generated incalculable wealth, and all the economic benefits that come with it, for this country. Left to its’ own devices, all that could have well been developed elsewhere.

            There is a power of money to be made in new technology. If people can buy cars that they can fuel up in the garage overnight, they will. They’ll sell. The only question is, who makes it? If we want it made here, we have to subsidize it here. Ideology has nothing to do with it. Hell, environmentalism doesn’t even have all that much to do with it. Look at the bigger picture.

          • 0 avatar
            thelaine

            The bigger picture is that government officials are corrupt, inept and incapable of engaging in industrial policy which is net productive over time. Markets are far too complex, aside from the dirty deeds of our elected elite. Forget it. Your faith in government is misplaced. Let markets work. They suck, but government is far worse.

        • 0 avatar
          stingray65

          Shaker – you are delusional if you think renewables are being stopped by the FF industry. Until someone comes up with a very cheap way to store massive amounts of power that renewables can only generate intermittently, they will never be viable without huge subsidies, because they will always need FF or nuclear backups for when the wind doesn’t blow or the sun doesn’t shine. Germany is able to utilize less than 2% of their renewable capacity because it isn’t very sunny in Germany.

          As for your mortgage deduction problem – I have no problem at all with getting rid of all government redistribution programs which account for 67% of US Federal spending. Let me keep my own money and I’ll take care of my own health care, retirement, food, housing, and car choice.

      • 0 avatar
        HotPotato

        No. We don’t need more “conventional power plant backups” at this stage. We need more energy storage. That smooths out the peaks and valleys of the sun and wind without burning stuff. (“Peaker” plants aren’t always as nimble as they sound from the name: the gas-fired one down the road from me takes three days to spool up to full power.) Trouble is, the law (at least in my state) lets utilities make guaranteed profits for building fossil fuel power plants whether we need them or not, but not necessarily for energy storage. My state has a comically large glut of fossil fuel power plants, some of which open to great fanfare, are hardly used, and then are decommissioned three years later, with ratepayers holding the bag…and the utilities lie (there really is no other word for it) and say electricity prices are high because of net metering that requires them to buy homeowners’ solar power.

        • 0 avatar
          stingray65

          Hot Potato – there currently is no storage system for excess renewable energy besides pumping water in reservoirs that can be used for hydro-power when the sun goes down. Obviously this solution isn’t possible in many places that don’t have reservoirs and hydro plants. Batteries of sufficient size to supply a city are not available and projected to be extremely expensive. Oddly, the best solution for backup power turns out to be coal powered power-plants that store coal until needed and spool up quickly.

  • avatar

    Is there some God of Energy with a big sense of irony? Just as the U.S. is looking forward to becoming fossil fuel independent, no longer having to go the Middle East to fight costly wars over strategic oil reserves, because it is able to pump up its own, prices go down, threatening the shale oil industry. Just imagine what would have (not) happened if this industry had flourished in the 80’s. No trillions of dollars costing wars in Iraq, Kuwait and Afghanistan. Not having to import expensive oil from countries like Saudi-Arabia… Tesla probably would have had a harder time to make it.

    • 0 avatar
      chuckrs

      I worked in the drilling side of the industry from the mid 70’s to the mid 90’s. For enhanced production, none of the required technology and hardware existed in the mid 70’s. A driller from the 1920’s could find his way around a 70’s land rig. In the mid 90’s he’d need extensive re-education. Today’s fracking, slant/directional drilling and micro-tubular technology would look like science fiction.
      As a cynic, I think the Middle East would just be as big a hairball as it is today even if current technology had been available in the 80’s. Not hard to imagine an alternative history where things get all pear-shaped in different ways, but allowing the US to ignore the events until they become existential, like WWII or the current standoff with the Korean Fat Boy.

      • 0 avatar
        stingray65

        Markets work pretty well when we let them. When oil prices rise the industry makes big profits which they can use to develop new technologies such as fracking that increase the supply and eventually result in lower prices. The incentives to develop new technologies are thwarted when governments attempt to control prices and profits for purposes of “fairness” or some other social justice nonsense, which was the case in the oil industry until deregulation started late in the Carter Administration and continued under Reagan. Government nonsense is also behind Venezuela’s problem of not having any oil to export or fuel the economy despite sitting on the world’s largest oil reserves.

        • 0 avatar
          HotPotato

          No shortage of govt nonsense in Venezuela for sure, but apparently also they are pumping sour heavy crude that can’t be refined just anywhere…so oil prices need to be pretty high for them to do it profitably, and that’s a problem when Saudi Arabia is years into a price war aimed at driving other producers out of business, especially since Venezuelan government revenue comes mostly from oil sales. Also, in their case some anti-market domestic gasoline taxation might be advisable in order to drive people out of the pollution-spewing 1970s land barges that Venezuelans hang onto because hey, gasoline is cheaper than, well, pretty much anything there.

  • avatar
    Whittaker

    Some fantastic comments on global energy realities in general and thorium based energy in particular.

    In regards to peak oil, it is incontrovertible that the “experts” were flat out wrong.
    Always beware of the “Al Gores” and your own susceptibility to doomsday scenarios that can only be mitigated with the common people’s money.

    • 0 avatar
      28-Cars-Later

      I believe the Iraq War was in part spurred about by Peak Oil (also Saddam’s little Oil-in-Euros stunt in 2000). Large scale mainstream fracking did not come along till about 2004/2005, and then with the oil run up and rate drop, expanded dramatically.

      If President Cheney knew in early 2001 when the invasion was being planned by 2005 the US would begin to ramp up huge production through fracking, the war could have been avoided and Saddam simply been offed putting Qusey in his place. Look at this chart of world production and see the drop-off at 1999, and then 2000 into 2003. The ASEAN crisis of 1997 most likely contributed to the 1999 drop, but by early 2001 when the NSC planned the war, it might appear to be peak oil in their eyes. Peak Oil threatens modern civilization, but any major movement in production also affects the *Petrodollar*, which of course is a national security matter.

      http://peakoilbarrel.com/world-oil-yearly-production-charts/

      • 0 avatar
        TW5

        Fracking became mainstream circa 2005 because that’s when the Energy Act of 2005 was passed. The bill effectively nullified the legal rulings and lawsuits pertaining to a decade old legal battle between LEAF and the EPA, in which LEAF successfully sued fracking under EPA jurisdiction via the Clean Water Act. Obama actually helped the cause of fracking during his administration, but only in the most Obama-fashion possible by telling the EPA to start working on new horrible regs that would take effect when he left office, rather than fighting existing Bush rules. Obama admin was also working on the demand side of the equation with CAFE and renewable energy subsidies.

        Regarding the price of oil, it wasn’t really OPEC, thus, our diplomatic relations with OPEC nations weren’t particularly injured by the price crisis. The problem was China, the world’s foremost mercantile powerhouse. China bought into Peak Oil Theory, and they spent their massive surpluses buying the rights (or buying oil fields) so Sinopec could develop resources for the Chinese economy. Unfortunately, Sinopec isn’t the most competent upstream company in the world so oil prices rose sharply as supply failed to respond proportionately to demand. Fracking reversed this trend and CAFE 2016 put downward pressure on oil consumption, while CAFE 2025 spooked the speculators.

        • 0 avatar
          28-Cars-Later

          I wasn’t aware of Sinopec’s acquisitions but after US forces secured the then second largest known oil reserves in the world I am not surprised by those PRC moves.

          Greenspan admits the Iraq War was about oil, but makes the argument it was more about ensuring safe transport than controlling supply. The invasion conveniently allowed for both.

          “Sounding more like an activist than a lifelong Republican who worked alongside six US presidents, Mr Greenspan, the former Federal Reserve chairman, said in an interview with the Guardian that the invasion of Iraq was aimed at protecting Middle East oil reserves: “I thought the issue of weapons of mass destruction as the excuse was utterly beside the point.”

          Mr Greenspan said it was clear to him that Saddam Hussein had wanted to control the Straits of Hormuz and so control Middle East oil shipments through the vital route out of the Gulf. He said that had Saddam been able to do that it would have been “devastating to the west” as the former Iraqi president could have just shut off 5m barrels a day and brought “the industrial world to its knees”.”

          http://www.washingtonpost.com/wp-dyn/content/article/2007/09/16/AR2007091601287.html

          There was also a theory based on some evidence I read which suggested some investment institutions ran up oil to make up for losses they were already encountering with MBS. Oil prices peak at $145.85 and starting on July 15, 2008 they slowly crashed. On September 16, 2008, Lehman filed for bankruptcy. The rest is history.

          Blue Horseshoe loves Anacott Steel.

          https://en.wikipedia.org/wiki/World_oil_market_chronology_from_2003

          • 0 avatar
            TW5

            @ 28-Cars-Later

            Regarding Greenspan’s remarks on the Iraq War, I think history has proven his instincts correct, but not his conclusion. It seems our decision to invade Iraq had more to do with surrounding Iran so US forces and intelligence operations on the east and west borders could surveil Iran and isolate it from other nations. Conversely, we apparently didn’t have a plan for unleashing Iraqi oil reserves, nor did we remove them from OPEC. Also, the world had just watched the US annihilate Iraq for messing with global oil reserves so I doubt Iraq’s reserves were in real jeopardy.

            If you’re looking for a conspiracy, I think we should all look into the current Russia psychosis. Based upon the somewhat insane reactions from the intelligence community and Obama-loyalists, it appears that Russia has done something much worse than mess around in Crimea and shoot down a passenger jet.

            In my opinion, what we’re not being told is that Russia’s fingerprints are all over the September 11 attacks, which would explain why US put Russia’s official 9/11 memorial gift (10-story Teardrop sculpture) in Bayonne, NJ where mourners would never find it. The story of Russia’s gift was also buried by the press, and most people don’t know it exists. Allegedly, there aren’t any signs in the industrial park to let anyone know it exists. Anyway, Iraq was once a Russian protectorate of sorts (HW actually asked for Gorbachev’s blessing prior to the Gulf War) so removing it from the Russian sphere of influence, while protecting SA and screwing with Iran probably seemed like a win-win.

            Regarding manipulation of the price of oil by the investment banks and brokerage houses, it was 100% true, and it continued after the MBS (CDO) meltdown. However, the banks’ antics were more cartoon villain than serious geopolitical misdeeds. The banks did petty things like buy stakes in oil transport companies, and then order inbound US tankers to sit offshore, while the commodities trading units positioned themselves for a minor supply shock. It was basically a bunch of lame plots to squeeze an extra nickel per gallon out of hapless US consumers. It didn’t move the needle like the underdevelopment of global reserves.

  • avatar
    28-Cars-Later

    28 sez:

    1. Map nationwide EV “adoption” by county or by zip code.
    2. Now, map estimated “wealth” by county or by zip code.
    3. Finally, map DEBT by county or by zip code inc mortgages.

    Ta da!

    Fake market caused by a fake economy caused by a fake currency and fake government/society. Resale on *everything* but Tesla is abysmal. Buyers spoke with their feet and do not wish to compete in purchasing the golf carts. The pure EV is niche at best until it has range of its hybrid cousin, and reduced charging time (which as I checked was 20-90 min). Hybrids are the short term, if not long term, future barring significant technological advancement. Anything else is simply drama.

    Are you not entertained?

  • avatar
    Jeff S

    No one has mentioned generating electricity from methane gas from land fills and sewer plants. Add the power generated from this methane gas and add it to the power grid. Energy from thorium as well, along with natural gas, wind an solar where feasible, hydro-electric, and geothermal. There is not so much a shortage of resources for energy as there are no real energy plans for the future. Years ago when I was getting a degree in Petroleum Land Management I did a research paper on alternate sources of Energy which were more abundant than I could have ever imagined. True not all sources are practical but there were many that were and that were clean sources. The mistake that many greenies make is assuming that solar and wind will meet all our energy needs. The reality is that energy should be generated from many sources and not just one source meets everyone’s needs. KY Utilities have set up power generating plants at landfills across KY that add extra energy to the grid. The Toyota plant in Georgetown, KY is supplementing its power with solar and methane gas from a nearby landfill. Methane gas is usually flared off at most landfills so why not use it for energy.

    There are 200 years of known coal reserves in the US with an estimate of 1,000 years of total reserves. Coal is dirty and we should eventually transition away from it but without a comprehensive plan we will never move away from it. We need to project energy needs on 10, 20,30,50, and even 100 year projections. Without a long-term energy plan we are going from one crisis to another and with erratic price swings.

    I don’t see us getting away from ICE anytime soon but we should be utilizing more hybrid drive trains.

  • avatar

    Good. Maybe those savages in oil producing nations will lose their international clout and focus on killing each other instead of the rest of the world.


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