When oil is no longer in demand
economist.com
economist.com
This is the same government attempting to roll back solar tax credits because they insist that the solar industry needs to stand on it's own 2 feet and compete in the "free" market.
Almost all entertainment in Canada for example, is done nearly tax free. Pharma, energy, small business etc. etc..
You emit the CO2 when you use your car (almost 50% of CO2 emissions are from autos).
And a bunch of other industries are responsible for most of the rest of CO2 emissions.
Not to mention it's a little like saying Pablo Escobar doesn't OD on drugs or steal your TV very often, it's the crackheads that do that...
Groundwater pollution and earthquakes are rare, and the latter are minor and have negligible impact. It's no more problematic than most other extraction industries.
'Above ground pipelines' are completely benign entities with almost zero environmental impact. Leaks are rare enough, and most of them are very minor and easy to clean up. Oil is an organic product, found commonly in nature, and small amounts of Oil spilled have no real impact. Unlike the big tanker spills, which can be devastating.
The highway you drive your car on has considerably more environmental footprint than any 'above ground pipeline'.
I remember very clearly the first time I visited western Texas (from Europe) as a child. The smell was sickening.
But if I had to chose between an Oil Pipeline and a 'highway' - I (and I think most people) would chose the Oil Pipeline any day of the week.
You do realize they are quite common? And that natural gas pipelines - which carry the same carbon-based materials run everywhere in urban areas - and that there's a good chance there is a gas pipeline, literally, in your backyard right now?
If you are living in an urban area, my guess is there is an 80% chance there's a carbon-based pipeline within 500m from where you are.
http://www.eia.gov/state/maps.cfm
(turn off some layers to make it easier to look at)
I guess that's transportation pipelines and not distribution pipelines though.
In health and sciences that would be enough to prohibit certain activities. But when industry for the benefit of jobs, GDP, etc has its way it means continue as normal regardless of the warnings.
This is why we are nearing a climate crisis. I suppose it is a form of the tragedy of the commons.
"In health and sciences this would be enough to.." is a massive problem, IMO. If the full measure of tobacco law is brought to bear on "energy companies", you could pretty well wreck the US economy without meaning to.
As socially agreeable as the D.O.J v Phillip Morris decision may be in many circles, it's a terrible precedent. All - all - prohibitions are Bad.
I don't think there will ever be any "control"; if there's regulation of it, the effect will be to send people out of the business. You'll be left with the people who feel up to tangling with the government over it. Guys like Dick Cheney.
The same can be said for the production of lithium-ion batteries. The mining and production of these batteries is just as bad for the environment. This is mainly due to the high concentration of Copper and Aluminum needed to make them work properly - which both need to be mined.
Fuel cells are a much better alternative to both combustion engines or lithium-ion electric vehicles:
https://www.bloomberg.com/news/articles/2016-02-08/phones-wi...
Both parts are not correct.
First, they spill very little in the grand scheme of things.
Second, an 'oil spill' unless it's quite large, is not a hugely damaging thing for the environment. Oil is a plentiful, organic material, found everywhere in nature. It's just not concentrated enough in most places to be extracted.
The soil in northern Alberta (an area the size of Florida) is literally oozing with hydrocarbons - same for Venezuela and many other places. Nobody considers those parts of the world 'toxic' - they are otherwise normal places.
Are you sys admin?
There is a certain percentage that is leaked from every pipeline in addition to the large leaks that occur during tanker and drilling accidents. Even a small percentage of the large volume they extract is a large volume to pour on the ground.
I'm not sure why you think the concentrations of oil in the soil occurring naturally approach even the smallest pipeline leak; would love to see some sources though if you have them.
Not to minimize the damage from spilled oil or suggest that it's no problem, but let's keep "spill a lot" in perspective.
Do your numbers include pipeline and other small but continuous sources of loss?
Here's where the 2010 (I notice a typo now in my original post, it's not 2011) comes from:
http://ops.fhwa.dot.gov/Freight/freight_analysis/nat_freight...
That includes spills from vessels, facilities, pipelines, and other unknown sources. Regardless, the spill due to Deepwater Horizon was so massive compared to more typical years.
Also, it's 786,987,110 liters (there are ~159 liters in an oil barrel).
The Saudis certainly don't. That oil is easy to tap and, under some circumstances, be used with little refinement (shipping). But Canadian oil, shale oil, requires massive energy to extract.
The problem is that water is increasingly scarce in many parts where fracking is done for reasons outlined in the book "Cadillac Desert".
Not true. Refining crude oil into gasoline or diesel is itself very energy-intensive.
It takes around 4.5kWh to refine each gallon of gasoline from crude. In many cases that energy is supplied by fossil-fuel burning power plants.
Volts for oil: https://m.youtube.com/watch?v=BQpX-9OyEr4
4.5 kWh is not a lot of energy.
It's the amount of energy needed to light a 1K lightbulb for 4 hours.
It's a pittance compared to what you burn in you car.
4.5Kw/h won't get you around the block :)
4.5 kWh is really a tremendous amount of energy just to refine a single gallon of gasoline. And it's energy that's completely lost, just converting hydrocarbons from one form into another.
By putting that energy directly into electric vehicles instead, you'd be able to power around half of all the vehicles on the road!
On the subject of getting around the block: A kilogram of gasoline contains some 46 MJ of energy. Gasoline is a bit lighter than water, so one kilo is around 1.3 liters. 46 MJ is equal to, roughly, 13 KWh, so 4.5 KWh are around 300 grams, or around 400 ml. A Manhattan city block is around 80x280 Meters, for a circumference of roughly 720 Meters. An inefficient modern car might use 8 Liters per 100 Kilometers, so 400 ml (or roughly 4.5 KWh) will move an inefficient modern car by around 5 Kilometers.
In other words, it'll get you around the block. Not once, not twice, but slightly less than 7 times.
4.5 kWh will take you nearly 20 miles in an electric vehicle. Not far short of what 1 gallon of gasoline will get you.
These tax breaks incentivize wasting money on travel and uprooting families to trot around the globe chasing favorable tax laws.
It's one thing to set a low tax rate, it's another thing to create the tax equivalent of a "loss leader" as marketing for a broader economy. I'm not saying it's immoral, but it causes chaos in the pricing signals and should be done carefully.
Categorically untrue.
What is the motivation to give a highly profitable industry tax incentives?
http://www.zerohedge.com/news/2016-11-30/carrier-issues-stat...
If people literally don't want the oil, at some point those tax breaks are going to look vulnerable.
Oil production has the problem that increasing in oil production requires spending money that will only pay off if the price of oil remains high for several years. Cheap producers like Saudi Arabia know this, and so try to make the price fluctuate with enough lows to wipe out expensive oil producers, and enough highs to get rich themselves. More marginal properties would make money, but it is hard to survive the lows.
Therefore government policy that produces an effective price floor encourages the production of otherwise marginal oil. This is effectively a bet that increased tax revenue from future production is worth the risk of that tax guarantee. And in the short run you get an increase in jobs for no actual outlay of resources. Which is a trick any politician can appreciate.
That said, it remains a bad policy. Once implemented, lobbying efforts are virtually guaranteed to expand government support until the public is guaranteed to lose money. Doubly so because oil producers can now play one government off against another in a race to see who can offer more. (Sports teams have mastered that particular game...)
Commuting by car is dead time. When I'm on the subway, I can read, send emails, catch up on work. Its also much better for the environment and costs a grand total of $200/year.
If you take into account the total cost of car ownership you will see that also is heavily subsidized. From car production to roads, parking spaces, oil production... if the accounting is done properly it is obvious that when you make 100 people travel all together in the same vehicle it is a lot cheaper that using 100 different machines to move that same 100 people. Cost wise it is a no-brainier.
I agree with you that lack of political will, and also suburban landscape, are going to make it very difficult for it to happen in the USA.
But the government has more economic incentives to extend those futures than other participants because they stand to earn money from taxes.
* battery factories * electric car incentives * open source car sharing / planning services. (get rid of the 30% uber tax meanwhile steering people towards shared services) * carbon taxes
it's been said a million times, but may as well keep saying it.
it'll fix the problem for good. no more wars. less environmental destruction.
Cars would actually be cheaper this way, if you wanted to bother owning one. way less maintenance. car pretty much lasts forever, just swap out the battery pack now & then.
Not in Michigan. You will have far more problems from a car than just battery maintenance.
The "Pro-Fracking" groups says that PA had 250,000 jobs but it ended up including This number captured everyone in those industries including every road construction worker, trucker, engineer, and steel worker in Pennsylvania.
The number is actually around 20,000 and the state makes no tax money from the production and only from income tax.
EIA outlook: http://www.eia.gov/outlooks/ieo/world.cfm
Oil will be in demand for a long time. The demand might peak but headlines like this seem to indicate oil isn't needed anymore.
Most people do not realize that 6-7 million barrels of oil per day must be found year over year to replenish the depletion of old oil wells. This requirement will drive exploration and investment.
The effect of petro-states will be much the same, though.
http://www.eia.gov/beta/international/index.cfm?view=product...
https://en.wikipedia.org/wiki/Growth_of_photovoltaics
There isn't anything to indicate that growth curve will slow; the manufacturing capacity is already in place, and more continues to be added. There are power purchase agreements at 2 cents/kWh, and I would not be surprised if you see prices below 1 cent/kwh in the next five years.
http://www.pv-tech.org/news/43695
https://www.bloomberg.com/news/articles/2016-05-03/solar-dev...
No, but if you're willing to spend a lot of energy you can pull CO2 out of the air and use it as a feedstock to make various fuels or plastics. Right now I think you'd have to burn 10 gallons of oil to make a single gallon so that's not efficient at all.
But if you literally had more solar than you knew what to do with (like Germany does on occasion) you could use that energy to make liquid fuels or plastics.
It's at least a decade and probably several decades off. But this is an economic problem, not a technical one.
We're going to need a lot of surplus energy to sequester all of the CO2 we've pumped into the atmosphere over the last 100+ years.
I wonder if anti aging technology would push people to start seeing climate problems in its larger context.
Something like this: https://www.terrapass.com/climate-change/carbon-offsets-expl...
There is no point at which sequestering CO2 by use of electricity is going to make sense. Until the day that we burn zero CO2 whatsoever, you're better off using the electricity as electricity and thereby burning less carbon than burning it and then trying to get it back.
And even at that point, we already have a thing that converts sunlight and CO2 into solid form. Plants.
In theory what you could probably do is cultivate algae in the ocean and then scoop it up in a net, bury it in the ground and repeat. But the scale needed to make a dent is harrowing.
> Until the day that we burn zero CO2 whatsoever
That day will come. And we'll then be at the point where its time to use cheap renewables to pull CO2 back out of the air and store it in a stable state where it can't be burned again.
problem with computer types is we think that high tech will rule and fix all. and that mind boggling high tech is around the corner always.
Then we are surprised when a Neanderthal wins the Presidency who says he WILL burn more coal. doesn't even matter if it's not economic.
Maybe instead we should become more aggressive. Turn off Trump's twitter. Turn off gmail & facebook in red states.
Of course there will be. Even burning a small fraction of the Thorium lying in spill heaps today will achieve that. In February 2019, when Tsinghua Uni demos the worlds first commercially viable fusion reactor, everything will change.
We will:
- convert cubic kilometres of seawater into potable water per day and irrigate the Sahara and the Outback.
- convert atmospheric C02 to carbohydrate fuels (while there are still need for them)
- extract cubic killometers of C out of the atmosphere and oceans for construction material.
- Drop the excess blocks of diamond into the mariana trench, those that we don't use for road base.
- etc
Is this your own prediction, or something that the university has announced publicly? I haven't heard anything about it.
Rather than using natural gas as a plastics feedstock, they are using methane from organic sources (livestock bioproducts, landfills, other agricultural waste). They are using "greenhouse gases" but not CO2.
https://en.wikipedia.org/wiki/Birkeland%E2%80%93Eyde_process
You can also plant nitrogen fixing plants and till them into the soil at the end of the season.
Makes me think about the flurry of ill directed excitement about a catalyst that with energy supplied electricity could convert water and CO2 to alcohol. One wonders if it wouldn't be possible use a similar catalyst to convert nitrogen and water to nitrate/ammonia.
Total petroleum products: 19.531 (million barrels/day)
Asphalt and road oil 0.343
Petrochemical feedstocks 0.331
Lubricant 0.138
Miscellaneous products and others 0.089
Waxes 0.006
If the oil industry existed solely for non-fuel uses, it would be extremely tiny, and probably entirely domestic. It would not be large enough to fund any new deep or complex drilling, and nor would it be large enough to fund even the fixed costs of existing wells.
Look at all the steps with some output to gasoline on the right:
https://en.wikipedia.org/wiki/Oil_refinery#Flow_diagram_of_t...
Also, keep in mind that some fuel uses, such as welding/soldering gasses, don't have an effective replacement at this time. Cutting fuel use to 0 at this juncture is effectively impossible.
Have a look at Gansu Wind Farm in China. [1] They build so many wind turbines there that they had to restrict production until they've finished the corresponding amount of high-voltage cables connecting it to major cities on the coast . Many of these connections have a higher capacity than any other existing in Europe/America. [2]
The potential for wind farms in this regions are huge. It's basically a large, windy desert. With enough cables, you can easily power major cities with it. You can even use it for baseload by combining them with batteries or pump storage.
The reason that China still adds coal is largely one of politics, similar to Trump's promises in the US. Coal adds jobs close to the cities. They've already built too many plants for demand, many will probably only run for a few years (hard to find sources on that, there are no numbers so everyone is just speculating how many there are).
But there are enough resources and potential to power the world's largest energy consumer mostly by renewables. And the picture is not that different for the US, where wind power in some regions is competitive without subsidies.
[1] https://en.wikipedia.org/wiki/Gansu_Wind_Farm
[2] https://en.wikipedia.org/wiki/List_of_HVDC_projects#Asia
That's great that China is developing solar and wind. Hopefully, it breaks into the double digits in 10 years. We have a long way to go, and we're on a clock.
The US is the 2nd largest Greenhouse gas emitter on the planet. It matters.
https://en.wikipedia.org/wiki/List_of_countries_by_carbon_di...
There's an irony in that we have an overabundance of natural gas due to shale, but oil itself is becoming far less important to the plastics industry than ever before.
Related viewing: https://www.youtube.com/watch?v=pyfVTBI4dgA
A shift in production like this would have major effects. For the order in many emerging countries and the state of the economy and labour markets in developed markets. That the EIA doesn't include a potential collapse of a big US industry sector in their forecast is somehow clear, still doesn't mean that it won't happen.
I don't think that they forecasted the decline of coal as drastically as it happened. Oil could be similar, just much bigger.
>I don't think that they forecasted the decline of coal as drastically as it happened
Coal is starting to come back in the US right now because natural gas prices are starting to rise. For the first time, as of this month, the US is a net exporter of natural gas. Natural gas production increased 70% '05-'14, which caused it to become cheaper than coal. As the US increases exports, the price will make coal more competitive. US power generation facilities often have both NG and coal based turbines allowing them to switch between the two depending on cost. Be careful forecasting the future of energy from short periods of data; the entire energy industry is cyclical going back to when my grandfather was drilling for oil in the 1920s (he went broke).
The transition from wealthy to poor in Aberdeen has been instantaneous. Everyone I know in the city has been affected—my fiancee was made redundant, my Dad (after 25 years at BP) and my best mate’s dad (after 25 years at Shell) too.
I studied CS at Robert Gordon University, which is cutting academic staff. I also worked at a design and dev shop, but that went bust in December last year.
It’s actually a really bleak time, but this outcome was avoidable.
Although my friends and family all live in Aberdeen, I feel like I can’t sustain myself there. I currently live in Wellington, NZ, which is beautiful, vibrant and diverse.
Scotland in general is very well placed for renewable energy, with both great geography and skilled labour. I feel like the businesses based in Aberdeen haven’t realised that opportunity though.
The local industry has been a one-trick pony with no ambition to diversify. The end result is what we’re currently seeing.
I'm unable to find the origin of the "burning Picassos for heat" quote, but it is catchy.
"An oil executive once observed that burning oil for energy is like burning Picassos for heat. Oil is extraordinarily valuable as the basis for so many products we use every day that the thought of simply burning it ought to be unthinkable. So versatile are oil molecules that they can be transformed into substances that serve as clothing, medicines, building materials, carpet, skin care products, sporting goods, agricultural chemicals, perfumes, and myriad other products."
http://www.resilience.org/stories/2012-11-04/burning-picasso...
I can foresee things like plastic wood being used to build all sorts of things.
So even if we increase plastic consumption by 2x (don't really see where that should come from), it's still a potential decline in oil consumption of 90%. Enough to basically destroy several industries (refining, drilling, well maintenance, pipelines, shipping).
Another interesting question is regarding gas stations. You'll still need some stations on interstates to re-charge for long distance trips. But you could basically get rid of all of them in cities. They would continue to exist as convenience stores, but probably with half the number of employees. This would be another huge sector that often employess untrained people, many of whom will likely not be qualified enough to work in battery factories.
Link to EIA report: http://www.eia.gov/energyexplained/index.cfm?page=oil_use
Now the employment of people is the other thing. Technology should make things cheaper and better. (cheaper either in initial price and/or the cost of maintenance) Fewer people will need to work and/or work fewer hours because things are cheaper and better. There was a time before there were two-income households. We could cut back to that without a huge disruption. An equilibrium will likely develop. If there is no income, there will be no consumers. Basic income may also be needed.
On a more funny note, those convenience stores had better well have some damn good restrooms like they have at Buc-ee's. Otherwise, why stop? The car is doing the driving. You're free to eat whatever you brought or simply sleep through the trip.
I think the concept is in the back of many poeple's mind, but the status quo is dominant and electric-everything on the road seems futuristic still. But as more and more people try electric cars and install solar panels, more people will see it and accept it as the new normal, and then things could change quickly, within 5 years perhaps.
And yes, this comment is intended to speed up that change.
These assertions don't match the reality of what's happening.
The cost to extract oil has plummeted, and that's reshaping the world order. It's destroyed Russia's entire financial plan.
In the US it's become far safer to ship. US domestic production has increased to the point of effective independence, and the US no longer depends on the Strait of Hormuz for its energy supply. Oil's vastly easier to move than natural gas. Current natural gas production exists as a byproduct of shale oil production.
It's also becoming far cleaner to extract. The progress shale has made in just a few years is astounding. The extraction methods used today are orders of magnitude cleaner than the ones used just a few years ago.
Known domestic supplies are also increasing exponentially, which means the industry is highly unlikely to be "reduced to almost nothing" any time soon. The cheapest form of energy always wins, and even incentives and penalties can only somewhat mitigate that.
Sure, we'll have self-driving electric cards on the roads soon enough, but most of that energy isn't going to come from nuclear power, solar, or wind sources.
This landscape is changing quickly, and a lot of assumptions people hold–assumptions that are based on many decades of reality–aren't true.
Here's a lecture that's relatively current (though 9 months is nearly stale given how quickly shale tech is progressing), and does a decent job of outlining the situation:
The oil industry in general has a very skewed vision of what "technology" means. It tends to mean PLC programming, and PLCs are a really weird, small market. It tends to mean systems integration of a rather crude order.
I heard someone refer to something called the "Economist effect", where an article in the Economist about a particular trend signals its end.
Sure enough: https://www.bloomberg.com/news/articles/2016-11-30/opec-said...
e: word order
It's real. Someone on HN mentioned them as a contra-indicator during a previous discussion. https://news.ycombinator.com/item?id=12516078
My supporting argument to him was that The Economist argued in 1999 that $10 oil was too expensive and that it could be headed to $5. So of course oil rose to $140 over the next decade! https://news.ycombinator.com/item?id=12517258
The interesting question is if it's gonna be different this time. Many argue that with shale production supply will be much more elastic, but it could also just be a false lead.
Pork cycle: https://en.wikipedia.org/wiki/Pork_cycle
http://www.economist.com/news/special-report/21710628-worlds...
* In the market oil is a very popular short. So much so that despite Iran coming back onstream, oil has since risen 20 points.
* Aramco's IPO will force it to open kimono on its reserves. Is there a negative surprise waiting there?
* Nobody is going to put electric cars into the southern hemisphere anytime soon, because the distances are too long and infrastructure too sparse. As Africa develops, oil demand there will increase, especially with increasing chinese involvement. Ditto Latam. Ditto central Asia, Middle east.
* We are seeing inflation picking up around the world, and oil is the classic inflation trade.
Finally, anecdotally, the economist has a long history of being a counter-indicator due to its susceptibility to consensus thinking.
The main way this effect breaks down is if the market shrinks so much that we loose the economy of scale; but it seams unlikely demand will fall far enough for that to occur.
Before you might be selling lubricants cheaply, because after refinement you had lots of lubricants as a by-product. If you need less car fuel, this changes the cost equation and lubricants (and other byproducts) might become more expensive even if car fuel becomes cheaper.
The field requires such a great energy density that I suspect only a remarkable breakthrough in energy density for weight would allow a fully electric solution. Hydrogen is also likely out as the storage cells would be under unimaginable stresses.
In the long term it might actually incentivize the creation of moderate/high speed rail lines in the US.
A route roughly following the I-80 corridor would top out somewhere below 9000 ft[1]. The California high speed rail is already being designed for what I would guess are similar elevations (and perhaps steeper grades)[2].
You could also route through southern Arizona and New Mexico, completely avoiding significant mountains.
1. https://en.wikipedia.org/wiki/Interstate_80#Wyoming
2. http://articles.latimes.com/2012/nov/12/local/la-me-bullet-m...
Given current train speeds, that comes out to around 500-700 miles being the upper limit of viable HSR. This is roughly the distance between Chicago and DC and also roughly the distance of the largest axis of most European countries.
Jet fuel is only 8% so if there is less auto usage, probably cheaper initially until supply is constrained due to lower demand. Then, other methods will start to get cheaper like wood to fuel[2].
But overall fuel and heating oil are about 70-80% of all oil use, we still use it for plastics which will be hard to get rid of which are 4% of usage. My guess is initially both jet fuel and plastic production prices will go down when autos are electric, at least initially.
[1] https://www.eia.gov/tools/faqs/faq.cfm?id=41&t=6
[2] http://www.denverpost.com/2016/11/14/first-commercial-flight...
It's self-stabilizing.
Probably the same thing that happened to coal, it just gets used elsewhere.
Historically used for heating, trains and ships
What we're debating is not the "if", it's what to do with them. The most endorsed answer thus far seems to be letting them drown in the Mediterranean Sea.
As long as we have air wars, we'll also have demand for oil. The logistics of moving an airforce around the world require floating airfields doubling as standalone fueling stations. How efficient would solar need to be for an aircraft carrier + all of its planes to run on solar?
As long as we have wars fought on the open seas... you get the idea. Oil, as a power source, moves quite easily and this cannot be ignored, strategically.
Militaries and governments know this. As long as we have physical borders that need to be defended, we'll have a demand for oil.
"World oil production will start to fall sometime during this decade, never to rise again. In 1956, M. King Hubbert predicted that U.S. oil production would peak in the early 1970's. Although Hubbert was widely criticized by some oil experts and economists, in 1971 Hubbert's prediction came true. The 100 year period when most of the world's oil is being discovered became known as "Hubbert's Peak". The peak stands in contrast to the hundreds of millions of years the oil deposits took to form. Hubbert's methods predict a peak in world oil production less than five years away."
According to the wayback machine [1], that page was first written in 2001.
[1] https://web.archive.org/web/20011121173642/http://www.prince...
Demand will never go to zero even if our energy needs our met renewably. I wonder what the ratios will be though.
A realignment where it becomes a buyer's market for oil will be a massive change to the status quo.
This is the point when I stopped taking the article seriously.