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Important to note, Saudi Arabia has basically the lowest cost of extraction in the world. While other places need to perform complex engineering and invest huge amounts of capital to extract oil, Saudi Arabia can basically just stick straws in the ground and watch it flow.

So if oil prices decline, Saudi Arabia will be one of the last profitable producers.

http://graphics.wsj.com/oil-barrel-breakdown/

https://knoema.com/rqaebad/cost-of-producing-a-barrel-of-cru...

That WSJ article is very interesting, and I haven't seen production costs broken down clearly like that before. It's curious that Saudi Arabia is listed as having $0 per barrel in the Gross Taxes chart even though there's a 20% royalty and 85% income tax on Aramco. I'm curious if that information wasn't know when the article was created, or if those fees are significantly different than export taxes from an accounting perspective.

I find it hard to believe that surface transportation is going to remain dominated by liquid fuels for that long.

Gasoline motor fuel accounts for somewhat less than half of global petroleum consumption.

If you could wave a magic wand and eliminate gasoline demand tomorrow, the oil business would suffer a catastrophic adjustment/contraction, yes. But it would not go away, it would still be huge and powerful and rich and important. There are a lot of applications where there is no viable alternative yet, and no viable alternative on the horizon.

Here's a perverse idea: falling oil demand and prices due to vehicular electrification could make petroleum an attractive fuel for electricity generating plants. Ugh!

Small changes in oil supply greatly affect price. If oil demand gets cut half, then oil prices plumet to 20$ a barrel and stay there for decades. And then the oil countries go bankrupt.

And who's going to pay to upgrade the grid to handle this mass switch to electric vehicles? Even the "just use solar panels" argument doesn't hold water because utilities are already struggling with storing the energy from non-constant sources (solar/wind/tidal) - and we've barely even gotten started on that front.

The current house and senate have an allergic reaction anytime infrastructure investment is mentioned, so I don't really see a solution to the problem arising anytime soon. I would imagine it will boil down to "oh, we just have to stop regulating the power companies so they can afford to upgrade" - at which point you'll find that dollar of electricity gets you about 1/100th the energy of that dollar of gasoline.

Among renewables, I expect wind to be the earliest and cheapest (at least for the near-future) way to charge EVs. Wind output tends to peak late at night/early in the morning: http://www.ercot.com/content/cdr/html/CURRENT_DAYCOP_HSL.htm...

Conveniently, that's when commuter vehicles are most likely to be parked at home. That's also when local distribution circuits are traditionally operating well below capacity, so there won't initially need to be any distribution capacity upgrades to support night time vehicle charging.

You don't need a grid to run electric vehicles. They can plug directly into distributed systems.

I want your points to be true, but there is NOTHING in history to indicate batteries will see an increase in capacity/decrease in cost similar to other technology products.

It's tempting to believe that all problems are soluble, but it's totally possible for there to be a problem, like "cheap, dense, durable energy storage" that ends up being more than humans are capable of solving.

AFAICT the batteries used in today's EVs are already durable enough and energy-dense enough for mass adoption. The #1 obstacle to EVs becoming truly mainstream is battery cost. Most of EV battery cost is still in manufacturing rather than raw materials. Most manufactured products become significantly cheaper to manufacture as production scale increases. EV battery production scale is increasing significantly in the next few years. I am therefore cautiously optimistic that battery production costs can decline significantly even without fundamental changes in battery chemistry.

Batteries are falling in price rapidly and will probably continue to do so. Some data here https://cleantechnica.com/2015/03/26/ev-battery-costs-alread...

I don't know if you need a huge increase in capacity/kg - present Telsas work ok but are expensive. I'd be surprised if costs don't fall considerably. As to falls vs similar tech products I'm not sure which tech products you'd compare them to. They'll probably fall in price slower than memory chips and faster than railway lines for example.

Then you missed Lithium batteries, which were more than a 2x improvement on state of the art.

But in any case, batteries are good enough today.

Sorry you're being downvoted.

On the capacity front, I think your caution is very well founded. Since their commercial release 25 years ago, lithium ion batteries have only increased in energy density by like 2.5x. The vast improvement in battery life of electronics has come from the electronics, not from the batteries. And lithium ion is already near (within an order of magnitude) of its ultimate theoretical potential. Future progress here is going to get harder and harder. No battery expert I know expects future progress to be as fast as past progress.

However, on the cost front, I think there's less reason to be pessimistic. Here the limit is more economics, and less physics. As the scale of production has risen, costs have fallen substantially over the past couple decades. And over the next few years, world lithium ion production is set to triple again with the Gigafactory and others coming online. How much cost savings this brings is uncertain, but there's no theoretical reason that greater automation and scale won't continue to push costs down.

tl;dr: Non-chemists are too optimistic about technical progress in batteries. Future progress will almost certainly be slower. But there are no physical limits preventing prices from continuing to drop with experience and scale.

> But oil as a commodity isn't going to maintain its outsized importance in world trade after demand for oil-as-fuel peaks.

You think it hasn't peaked already? I mean the last few decades we saw another boom with some second world economies getting motorized, but that's done now. If we are not behind peak already we are so close that it's irrelevant, I'd say.