Texas Is About to Create OPEC’s Worst Nightmare
bloomberg.com
bloomberg.com
Look at the City of Austin and the amount of renewables year over year: https://data.austintexas.gov/Utilities-and-City-Services/Gen...
You can see a real-time chart of energy mix here: https://austinenergy.com/ae/about/environment/renewable-powe...
Most days renewables are 50% of electricity consumes. I pay a bit extra for 100% wind- and it's not that much more than 50/50. I could easily see Texas being a majority renewables while at the same time exporting more and more Oil.
There isn't really anything contradictory about that. Oil has a vastly different set of use-cases than wind energy. There are no electric alternatives for most long distance transportation, which is a huge chunk of our energy consumption.
Gaining independence from OPEC by supporting local oil extraction while simultaneously moving as much of the grid to renewable as possible is a completely rational choice.
What about trains?
There are currently at least two groups trying to do passenger trains between Austin, Dallas / Fort Worth, and Houston. I'm not sure what they want for Federal or State money.
Tankers' environmental impact is disastrous, although they actually are comparatively quite CO2-efficient for shipping goods. It's just that there is so many of them now.
Source: https://3kpnuxym9k04c8ilz2quku1czd-wpengine.netdna-ssl.com/w...
I do wonder what happened to the Transatlantic tunnel
I bet that this would be much better for the environment than algae.
http://www.caltrain.com/projectsplans/CaltrainModernization/...
Hydrogen is probably a dead end. It's too bulky, hard to handle, and the energy efficiency is terrible. Most hydrogen fuel today is produced from natural gas, which is just stupid.
While electrification of the US freight rail network certainly may happen, you have to remember the US is twice as large as the EU (9.1M sq km vs 4.5M sq km) and only a quarter the population density (33 vs 117 per sq km). Long distance passenger train routes don't really make sense (electrified or not, very few people want to spend 2 days on the train when a flight is 4 hours), meaning rail in the US is almost entirely freight.
China also does a lot of freight and has gone through a lot of electrification (75%). Freight runs between Beijing and Lhasa, which is similar to NYC to LA.
Some intersection of actually-competitive pricing and higher speed tracks, and it seems like rail would have the potential to be plenty competitive. Lower vehicle purchae, maintenance & fuel costs, greater comfort. If I could make a 2 hour flight in 4 or 6 hours by train for 90% of the cost, I'd probably never fly again.
The US freight network hasn't yet managed to fully rollout positive train control, electrification seems like a much harder problem. Moving freight requires a lot more power than moving people, and also has a lot more sidings and things. Some lines run double height cars, which I'm guessing would add additonal complications.
China has a lot of freight, is as large as the USA, and has a decent amount of electrification as well.
https://www.forbes.com/sites/timtreadgold/2018/09/20/the-inc...
- Maximize returns on existing investments: Mineral rights and leases and options and equipment.
- Maintain and gain control. Renewable energy is just fine, then, as long as they are in control and profiting from it.
The problem is, this screws over a lot of people and environments, in the meantime. Slows investment -- the U.S. has already lost much of the technology lead and even more of the manufacturing lead, to overseas. And, it vests the least progressive elements of our society with control over our energy future.
Oh, and environmental pollution -- not just CO2, but the outfall of CO2, heavy metals, radioactive byproducts (yes, from fossil fuels), continued support of authoritarian and criminal regimes...
Oh, yes, they can actually slow deployment, as well. Such as trying to get state legislatures to "outlaw" self-sufficient home deployments. Fighting, as they did for some time, end user feeds back into the grid (that can require grid upgrades to handle, at scale).
Anyway, these are not the people and organizations I want in control of our future energy production and distribution. Nor, in my opinion, do they deserve to profit from it.
But that's their goal.
They are incredibly smart business people and a State Gov that is incredibly business friendly, which has made Texas an energy powerhouse from renewable energy, oil, natural gas, refining capabilities and the infrastructure to move it all to market.
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3
While your number seems like a lot, it's really just a drop in the bucket. The US consumes close to 8 billion barrels of oil annually. I was, however, surprised that it was still as high as 0.5%.
Eh? When I worked for a United States generation company our coal-burning plants could and would be switched to bunker fuel if the price was right. To be fair it's not much (less than 5%) depending on how you slice it, but in their 2016 annual report [1] Dynegy reported 2.6 TWh (terawatt hours) sold into the wholesale market and .7 TWh into retail.
Be careful about blanket statements unless you're an expert in the area because other HN readers are experts.
[1] = https://www.dynegy.com/sites/default/files/Dynegy_2016_Annua...
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3
Here's a better source. It's 0.5%. I felt that was enough to warrant using "not used in developed countries," but fair enough.
>Be careful about blanket statements unless you're an expert in the area because other HN readers are experts.
Easy there hotshot
Visit Hawaii sometime. Oil on Oahu. Diesel on the other islands.
Diesel is a useful option for places not connected to a larger grid.
Also look at Norway--huge petroleum wealth, lots of Teslas because oil is dirty.
But seriously, thanks for sharing. TIL: https://en.m.wikipedia.org/wiki/Revealed_comparative_advanta...
Your electric car will get cleaner over time (90-95% of new generation coming online each year are renewables), your petrol vehicle will burn petrol forever.
What? You say "there is no electrical generation source that is worse than oil" then say "Only 1% of energy makes it to the wheels when burning petroleum to propel a vehicle forward." A gasoline powered car is not an electrical generation source so I'm sure what your saying, especially because coal is a much dirtier source for generating electricity. Also a quick google search shows that gasoline powered vehicles have a tank to wheel efficiency around 16%[1][2] which is much higher then the 1% you stated.
And my original point was, If a electric vehicle is being charged from a dirty source like a coal plant then it can be more polluting then driving an efficient petroleum car. Coal is more polluting then Oil when burned and converting the heat to electricity is a huge hit to efficiency. Only about 30% of the energy from coal is turned into electricity. Plus you have transmission loss from getting the electricity from the power plant to the EV.
[1]: https://cleantechnica.com/2018/03/10/electric-car-myth-buste...
[2]: https://matter2energy.wordpress.com/2013/02/22/wells-to-whee...
Just a minor thing, and doesn't change your point, but have you considered that cars have alternators which use the turning of the engine to generate electricity?
https://en.wikipedia.org/wiki/The_long_tailpipe#Carbon_footp...
And all grids get greener every year. And this accelerates, so your argument gets weaker over time.
Oil is an important automotive fuel, but it's a chemical stock for everything that's touching your skin at the second. Hilariously, we should probably start wondering if our plastics come from oil sourced from "ethicality regulated states" or something.
Texas had always pumped a lot of oil. Texas was the oil capital of the world for a long time before saudi arabia came around.
> but they are building wind like crazy as well.
That's because one of the wealthiest men in the world has been a big fan of wind energy.
http://www.nbcnews.com/id/19231397/ns/us_news-environment/t/...
> I could easily see Texas being a majority renewables while at the same time exporting more and more Oil.
No major state or country is going to be renewable majority for a very long time ( if ever ). Least of all texas.
https://www.eia.gov/energyexplained/images/charts/primary-en...
But what's going to happen is we'll frack everywhere, destabilize our bedrock and pollute our water, and still encounter a Hubbert peak in roughly the time it's taken us to ramp up domestic production (probably sometime around 2040). There's no way to predict an exact date for this though.
Then since Venezuela, the Middle East, Russia, the Baltic states, Canada, etc have more oil than anyone, we'll be at their mercy again:
https://en.wikipedia.org/wiki/List_of_countries_by_proven_oi...
The best thing we could do from a scientific/environmental/human rights standpoint is to stop using petroleum for fuel and only use it for manufacturing and as a bridge to renewable energy. This is unprofitable^H^H^H^H^H^H^H^H^H^H^H^H unrealistic so we'll burn it all until externalities can no longer be ignored and the overall prices matches solar. This happened sometime between 2000 and 2010, but it will take a generation for the the general public to notice.
In the meantime I'm a typical hypocrite with an 80s Toyota truck like the one in Back to the Future that gets 15 mpg. YMMV.
https://www.newyorker.com/magazine/2018/01/01/the-dark-bount...
Interesting pieces:
In large part because of high oil prices, a disproportionate share of America’s economic growth over the past decade has come from Texas. The gross domestic product of the state is $1.6 trillion; if it were an independent country, its economy would settle in around tenth place, eclipsing those of Canada and Australia. California, with forty per cent more residents, has a G.D.P. of $2.6 trillion, but since 2000 job growth in both Dallas and Houston has expanded by about thirty per cent—three times the rate of Los Angeles.
..
.. Because native Texans were suspicious of outside corporate interests—especially John D. Rockefeller’s Standard Oil—two local companies were formed to develop the new field: Gulf Oil and Texaco. (Both companies have since merged with Chevron.)
..
.. To entice investors to help him drill yet another well, he drew up fake geological reports indicating the presence of salt domes and stratified-rock folds, which can trap oil and natural-gas deposits beneath them. The phony report suggested that, at thirty-five hundred feet, a well could tap into one of the greatest oil deposits in the world. Once again, a wild prediction turned out to be true.
From https://www.bloomberg.com/news/articles/2017-08-08/shale-exp...
>Here is the free cash flow after capital expenditure for a sample of 33 E&P companies, grouped by their main shale basin (all figures compiled by Bloomberg).
>It doesn't require the closest examination of that chart to see fracking is very capital intensive, with E&P firms spending way beyond their means even in the relatively halcyon days of 2012 and 2013. The 14 Permian-exposed companies in that sample saw their cash burn accelerate over the past 12 months to a collective $11.5 billion.
> "Global oil demand has so far absorbed the extra U.S. crude barrels, limiting the impact on prices"
This slightly curbs my optimism.
https://www.reuters.com/article/us-usa-oil-exports-study/sha... (Shale oil growth to overwhelm U.S. refiners, fuel exports: study)
https://www.cnbc.com/2018/04/17/shale-oil-has-a-refining-pro... (Shale oil has a refining problem, and Morgan Stanley thinks investors can profit)
If you want to lessen your dependency on middle east energy, switch to electric cars, trucks, and busses faster.
https://en.wikipedia.org/wiki/United_States_Fifth_Fleet
> Well, even a blind pig finds an acorn once in awhile. While working on a recent piece on how to cut $1 trillion from the $7-trillion-plus U.S. defense budget over the coming decade, I stumbled upon a provocative analysis by Roger Stern, an economic geographer at Princeton University. He says the U.S. has “mis-allocated” — others might say “wasted” — $8 trillion since 1976 protecting the oil flow from the Persian Gulf that fuels much of the global economy. Especially since in 2010, when the U.S. was the destination of less than 10 percent of the oil flowing out of the Gulf.
> The U.S. has insisted, since the days of the Carter Administration, that the oil flowing out of the Persian Gulf is a vital national-security interest of the U.S. Beyond that, Presidents and the Pentagon have said, the narrow Strait of Hormuz is a vulnerable bottleneck for shipping headed out of the Gulf. Any troublemaker — especially Iran — could bring the U.S. and world economies to their collective knees by shutting it down by sinking a couple of tankers as they pass through. Consequently, the U.S. has poured tons of money into the region since then, including three wars. It has bulked up its military forces in the neighborhood — including the U.S. Navy’s 5th Fleet, headquarters in Bahrain, smack dab in the middle of the gulf — to keep the oil flowing.
http://nation.time.com/2011/04/24/a-question-for-the-obama-a... (Have we wasted $8 trillion defending the Persian Gulf from a non-existent threat?)
No doubt Trump would love to recall rhe fleet, if possible, but it’s not. Unless he’d like to see chaos in the world economy.
Like trade wars usually tend to cause?
"oil is fungible on the world market"
In the medium term, these two statements contradict each other. If all it takes to avoid a 1970s-style OPEC crisis is to update the facilities at a few refineries, that job will get done. Actually, that job will probably get done anyway, because after all, shipping oil overseas isn't free.
Anyway, you're right that decreasing oil demand will lessen dependency on foreign oil. You're wrong that our current approach "isn't feasible". Our oil imports from Saudi and worldwide are falling. See: https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epc0_im0...
No, facts are facts. Your own citation shows the US is still importing 3 million/barrels a day from OPEC (~33% of US daily consumption), and has held somewhat constant at that level since 2013. The price of oil would rise if those 3 million/barrels a day weren't on the world market, or if the US was required to source those barrels elsewhere.
https://www.eia.gov/tools/faqs/faq.php?id=727&t=6
Not a lot of electrical generation sources in the US run by authoritarian governments compared to oil producers. If it's not Saudi Arabia, it'll be another government attempting to control energy supplies. Can't control a country's electrical generation so easily, and therefore it makes the most sense to incentivize the rapid electrification of transportation.
Really? As a European, I feel much closer to Iran's history and culture than Saudi Arabia's. My understanding is that the US chose a side a long time ago (cf. ARAMCO foundation) and decided to go "all in", even if it goes a long way against its interest. And things are getting worse with time.
This is naive. When you cut off Saudi Arabia, you cut off all OPEC. And that would devastate America, even at the current levels of domestic production.
curious what else
It's the snake that bites its own tail, because these all go back to oil.
About the alleged common "distaste for Iran", for instance: https://en.wikipedia.org/wiki/Nationalization_of_the_Iranian...
I don't see how the coup in 1953 means that we don't have a distaste for Iran today. Obviously it's an important part of recent history, but the government is not the same. The US and the UK used to fight in wars, but now we are allies.
Arms deals don't go back to oil because it benefits the American military industrial complex, not the energy industry.
Edit: Clarified statement on coup.
Edit again: I clicked on your old unedited link so I replied to a false understanding of what your point was, now my reply looks dumb.
>Iran wants to spread its sect of Islam, and that is at odds with a lot of the Arab world
That had nothing to do with the US.
>I don't see how the coup in 1953 means that we don't have a distaste for Iran today
I understand that the Iranian Revolution is an obvious reaction to the 1953 coup, which made the two nations distaste one another for a gooood time. Without oil, no coup. Without the coup, one less big reason for Iranians to put Islamist to power and chant https://en.wikipedia.org/wiki/Death_to_America
All these things became complicated because of oil. Switching to renewables would slowly but surely simplify all of this.
I hope they have good sales reps.
That is impressive and would seriously undercut a whole lot of nations including Russia and Venezuela. It really shows the advances and quality of the oil.
In the meantime, China is building a global supply chain to provide with world with solar panels and batteries. And bankrupt all the US companies/banks that keep investing in fossil fuels. It's all about your investment horizon I guess.
If the US stays focussed on mid-east for the next 2 decades, and not counter China. Or rather just let China be as they are. China will have the world domination on a platter for the next few centuries.
Oil is the old game. That game probably even ended after the 1990's. The US has been fighting wrong wars for the past 30 years.
China is quietly, and yet steadily emerging as the next super power. Albeit like the UK in the past. No intention to fight any direct wars or make aggressive moves. Instead control the world's oceans, and establish trade empires. Let the current super power bankrupt itself fighting wars.
It's actually helping to kill off oil investments because why bother if the prices stay below what is actually profitable. A lot of recent investments only made sense at 70$+ a barrel. Now that 30$ is on the table, those investments are effectively under water. The price volatility alone should scare investors. Imagine it drops another 10$ because Opec throws in the towel and unleashes the floodgates?
Meanwhile, oil dependence is being addressed by ongoing electrification so lower demand is going to keep prices low even as supply declines. This ensures that by the time the shit hits the fan (cheap supplies run out), it won't be as much of an issue. In 20 years when most transport is electric, the barrel price for oil will be much less relevant for most. There will still be a need for oil of course but not at the levels needed today.
This also gives countries a great opportunity to raise fuel/carbon taxes without suffering high oil prices -- which would keep demand lower, resulting in even lower pre-tax prices and a very helpful feedback loop.
> If Saudi Arabia and its allies cut production when they gather Dec. 6 in Vienna, higher prices would allow shale to steal market share.
Considering oil prices have gone from near $80 to near $55 in about a month, I'm guessing they've decided to maintain or even increase production. That is unless the saudis and the wall st banksters decide to game the market as they do from time to time. But of course the bloomberg "journalists" wouldn't know anything about it or investigate that because they are allergic to real journalism like more establishment media.
> But because the Saudis need higher crude prices to make money than U.S. producers, OPEC can’t afford to let prices fall.
The saudis make money on their oil. They don't need higher prices for that and certainly their oil is more profitable than shale oil. What they need is higher oil prices to maintain their government budget.
If you want to know what a joke bloomberg is...
The same journalist wrote this today : "Saudi Oil Production Surges to Record in Early November"
https://www.bloomberg.com/news/articles/2018-11-21/saudi-oil...
If anyone working at bloomberg knew what they were talking about, they wouldn't be working at bloomberg. They'd be raking in the millions working for themselves.