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2020 Will Be A Crucial Year For Oil

2020 Will Be A Crucial Year For Oil

Oil

It’s the start of a new year and a new decade, and the oil market is as unpredictable as ever.

Will OPEC+ extend its cuts? Will U.S. shale finally grind to a halt? Is this the “year of the electric vehicle”? Here are 10 stories to watch in 2020.

Shale debt, shale slowdown. The debt-fueled shale drilling boom is facing a reckoning. Around 200 North American oil and gas companies have declared bankruptcy since 2015, but the mountain of debt taken out a few years ago is finally coming due. Roughly $41 billion in debt matures in 2020, which ensures more bankruptcies will be announced this year. The wave of debt may also force the industry to slam on the breaks as companies scramble to come up with cash to pay off creditors.

Year of the EV. Some analysts say that 2020 will be the “year of the EV” because of the dozens of new EV models set to hit the market. In Europe, available EV models will rise from 100 to 175. The pace of sales slowed at the end of last year, but the entire global auto market contracted. EVs may struggle to keep the pace of growth going, but EVs are capturing a growing portion of a shrinking pie.

Climate change. 2020 starts off with hellish images from the out-of-control Australian bushfires. 2019 was one of the warmest years on record and the 2010s was the warmest decade on record. As temperatures rise and disasters multiply, pressure will continue to mount on the oil and gas industry. As Bloomberg Opinion points out, climate change has surged as a point of concern for publicly-listed companies. Oil executives are betting against climate action, but they are surely aware of the rising investment risk. In the past two months, the European Investment Bank is ending financing for oil, gas and coal, and Goldman Sachs cut out financing for coal and Arctic oil. More announcements like this are inevitable.

…click on the above link to read the rest of the article…

Visualizing How Much Oil Is In An Electric Vehicle?

Visualizing How Much Oil Is In An Electric Vehicle?

When most people think about oil and natural gas, the first thing that comes to mind is the gas in the tank of their car. But, as Visual Capitalist’s Nicholas LePan notes, there is actually much more to oil’s role, than meets the eye…

Oil, along with natural gas, has hundreds of different uses in a modern vehicle through petrochemicals.

Today’s infographic comes to us from American Fuel & Petrochemicals Manufacturers, and covers why oil is a critical material in making the EV revolution possible.

 …click on the above link to read the rest of the article…

Are We Sleepwalking Into The Next Oil Crisis?

Are We Sleepwalking Into The Next Oil Crisis?

Oil

One school of thought is that future oil demand is set to decline because consumers will have better options. Many in this “peak demand” camp believe that the growth of electric vehicles will soon make oil obsolete.

That’s a relatively painless view of the future and is consistent with much of our past experience. Old technologies are frequently replaced by newer, better, and cheaper technologies.

I have written previously on why I don’t believe this version of future oil demand will unfold anytime soon. In a nutshell, if you “do the math,” it becomes clear that it will be years before EVs can take a meaningful bite out of oil demand.

Meanwhile, some organizations are sounding the alarm that rather than a peak demand scenario, we may soon face a peak supply scenario. Or at the least, the loss of global excess spare capacity. The last time this happened, oil prices rose above $100 a barrel.

Words of Warning

In January 2017, Saudi Arabia’s energy minister Khalid A. Al-Falih warned CNBC that he foresaw a risk of oil shortages by 2020:

“I believe if the investment flows that we have seen the last two or three years continue in the next two or three years, we will have a shortage of oil supply by 2020. We know, from what we have seen in the last couple of years, that prices around the current level and below are not attracting enough investment. We know the level of natural decline that existing production is undergoing, and we know that demand is picking up at 1.2 to 1.5 million barrels a year. So between increase in demand and natural decline, we need millions of barrels every year to be brought to the market, which requires massive investment.”

…click on the above link to read the rest of the article…

Not So Happy Motoring


It hasn’t been a great month for America’s electric car fantasy. Elon Musk’s Tesla company — the symbolic beating heart of the fantasy — is whirling around the drain with its share price plummeting 22 percent, its bonds downgraded by Moody’s to junk status, a failure to produce its “affordable” ($36,000 — Ha!) Model 3 at commercial scale, a massive recall of earlier S Model sedans for a steering defect, and the spectacular fiery crash in Silicon Valley last week of an X model that may have been operating in automatic mode (the authorities can’t determine that based on what’s left), and which killed the driver.

Oh, and an experimental self-driving Uber car (Volvo brand) ran over and killed a lady crossing the street with her bicycle in Tempe, Arizona, two weeks ago. Don’t blame Elon for that.

There’s a lot to like about electric cars, of course, if, say, you’re a Google executive floating through life in a techno-narcissism bubble, or a Hollywood actor with wooly grandiose notions of saving the planet while simultaneously signaling your wealth and your “green” virtue cred. Teslas supposedly handle beautifully, ride very quietly, have great low-end power, and decent range of over 200 miles. The engine has something like twenty moving parts, is very long-lasting, and is easy to repair or change out if necessary.

Are they actually “green and clean?” Bwaahaaaaa….! Are you kidding? First, there’s the energy embedded in producing the car: mining and smelting the ores, manufacturing the plastics, running the assembly line, etc. That embedded energy amounts to about 22 percent of the energy consumed by the car over a ten-year lifetime. Then there’s the cost of actually powering the car day-by-day. The electricity around the USA is produced mostly by burning coal, natural gas, or by nuclear fission, all of which produce harmful emissions or byproducts. But the illusion that the power just comes out of a plug in the wall (for just pennies a day!) is a powerful one for the credulous public. The cherry-on-top is the fantasy that before much longer all that electric power will come from “renewables,” solar and wind, and we can leave the whole fossil fuel mess behind us. We say that to ourselves as a sort of prayer, and it has exactly that value.

…click on the above link to read the rest of the article…

 

Another way to destroy a grid: add a million electric vehicles

Another way to destroy a grid: add a million electric vehicles

New electric vehicles have big fat batteries, which will help solve the problem known as “charge anxiety” (let’s call that the Flat-Bat-Fear).

The new fat-batteries, however, have the small catch that they need two days to trickle charge. Hmm. Then there is the other catch that each slow charger (7KW) is equivalent to adding nearly three houses to the grid. At the same time our Energy Minister Josh Frydenberg predicts there will be one million electric cars on Australian roads by 2030.

You might think this is slow motion train wreck, but we might avoid this if households opt for fast 50KW chargers. In that case we can do the train-wreck at top speed.

Each fast charger will apparently be “like” adding the equivalent of 20, count them, 20 homes.

This is fearmongering obviously — no one is going to want a fast charger when they could leave the car in the garage for 48 hours instead.

New Zealand report claims new generation electric vehicles threaten the power network

Ben Packham, The Australian

New Zealand’s biggest energy distributor, Vector, warned electric vehicle chargers “put a large electrical load on the network”, with even 2.4kW “trickle” chargers adding the equivalent of one additional home to the grid.

Vector’s electric vehicle network integration green paper said the shift to larger batteries would encourage drivers to opt for faster chargers, to avoid a two-day charge. A “slow” 7kW charger would add the equivalent of 2.8 homes to the grid, while a “rapid” 50kW charger would add the equivalent of 20 homes.

It said New Zealand’s power grid could require a $NZ530 million ($500m) upgrade if 7kW chargers were used, and one in four cars on the road were electric vehicles.

Can someone calculate the cost per EV in NZ? Thanks…

Are Electric Cars As Clean As They Seem?

Are Electric Cars As Clean As They Seem?

electric car

Tesla’s unveiling of its mass market Model 3 sparked a global interest in making electric vehicles the next big thing in automobile manufacturing. But can the category’s green agenda keep up with its metal and recycling needs?

The concept of bunking the traditional engine for a non-gas guzzling counterpart has been here for decades, but creating an ecosystem for battery charging and bringing vehicle costs down was a challenge for decades.

The sheer force of Elon Musk’s vision is building the infrastructure needed to sustain millions of electric cars in the United States, Europe, and elsewhere. Most major manufacturers have joined the enthusiasm to ditch old-school engines to construct the international fleet of tomorrow.

But this new step doesn’t solve all of the world’s environmental pollution issues related to transportation. The extraction of rare earth minerals, the disposal of lithium-ion batteries, and the sourcing of the energy that powers charging stations are all issues that plague the future of the green argument for electric vehicles.

As Wired notes in an article from last year, electric vehicles are most efficient when they’re light. That way, they need minimal energy to transport their valuable cargo. In search for a light material to carry and conduct batteries, scientists discovered the power of lithium—a highly conductive metal that adds little burden to the vehicle’s frame.

Discovered in 1817, this key ingredient is mostly extracted from deposits in the United States, Chile, and Australia. The most cost-effective method for lithium processing involves pumping salt-rich waters into special evaporation ponds that eventually produce lithium chloride. Then, a special plant adds sodium carbonate to turn the former lithium chloride into lithium carbonate, a white powder.

…click on the above link to read the rest of the article…

Electrifying the A9 Trunk Road in Scotland

Electrifying the A9 Trunk Road in Scotland

The Scottish Government recently announced the phasing out of the internal combustion engine by 2032, i.e. in 15 years time. To support the policy it was also announced that the A9 trunk road would be electrified with the provision of charging points along the route. Like all announcements made by the Scottish Government on energy policy I viewed it with some skepticism and I wanted to find out what it would entail. Did this mean hundreds, thousands or tens of thousands of charging points?

The A9 Trunk Road Route

The A9 today originates in the heart of Scotland’s densely populated Central Belt near the town of Dunblane, the home of Andy Murray. The road is in three main sections. Dunblane to Perth (29 miles); Perth to Inverness (112 miles) and Inverness to Thurso (109 miles) giving a grand total of 250 miles. It is Scotland’s longest road. Thurso lies on the N coast and is home to the Dounreay fast breeder reactor (now being decommissioned).

Figure 1 The route of the A9 showing the towns mentioned in the text. Blackford and Tomatin are the points where traffic volumes are recorded.

The most famous section is Perth to Inverness since just N of Perth the road enters the Highlands and winds its way north through the scenic Grampian and Cairngorm Mountains and it is this section that will be the focus of this post.

Electric Car Range

“Family” electric cars today have a typical range of 100 miles. Teslas will give you 200 to 400 miles but only through cramming a huge battery pack into the chassis adding lots of weight and cost. While there is much ‘Greenspeak’ about battery technology improvements, in reality battery technology has not improved much for decades since the Li ion battery came of age.

…click on the above link to read the rest of the article…

California Mulls Combustion-Engine Car Ban: “You Could Stop All Sales By 2030” 

California Mulls Combustion-Engine Car Ban: “You Could Stop All Sales By 2030” 

California, the state which single-handedly turned Elon Musk into the billionaire that he is today by forcing taxpayers to subsidize his unprofitable electric vehicle scam via “Zero Emission Vehicle” credits, is now considering a full ban of combustion-engine cars by as early as 2030. The potential ban was discussed by Mary Nichols of the California Air Resources Board, the same folks who decided to regulate cow farts last year, who told Bloomberg that Governor Jerry Brown has expressed interest in a ban.

Governor Jerry Brown has expressed an interest in barring the sale of vehicles powered by internal-combustion engines, Mary Nichols, chairman of the California Air Resources Board, said in an interview Friday at Bloomberg headquarters in New York. Brown, one of the most outspoken elected official in the U.S. about the need for policies to combat climate change, would be replicating similar moves by China, France and the U.K.

“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?’” Nichols said, referring to China’s planned phase-out of fossil-fuel vehicle sales. “The governor has certainly indicated an interest in why China can do this and not California.”

California has set a goal to cut carbon dioxide emissions by 80 percent from 1990 levels by 2050. Rising emissions from on-road transportation has undercut the state’s efforts to reduce pollution, a San Francisco-based non-profit said last month.

“To reach the ambitious levels of reduction in greenhouse gas emissions, we have to pretty much replace all combustion with some form of renewable energy by 2040 or 2050,” Nichols said. “We’re looking at that as a method of moving this discussion forward.”

…click on the above link to read the rest of the article…

Blowout Week 194

Blowout Week 194

Britain, France, Norway and India have already announced their intention to ban fossil-fuel-powered vehicles in favor of EVs and a number of other countries are considering it, and in this week’s Blowout we feature China, which is about to join the club. To follow we have the usual mix of energy-related stories from around the world, including Iraq facing civil war; Kurdistan’s referendum; things looking up in the N. Sea; PWRs in UK; Australia’s energy woes; nuclear in Japan, Poland, South Africa and Saudi Arabia; India’s power plants running out of coal; California’s clean energy proposals in trouble; the UK capacity auction; Trump to blame for Harvey and Irma; why lithium won’t win and how climate change could kill us all by 2100.

Bloomberg: China to end sales of fossil fuel vehicles

China, one-third of the world’s car market, is working on a timetable to end sales of fossil-fuel-based vehicles.

The announcement is important because the most influential players in the global auto market have always been not companies, but governments. Diesel cars make up about half of the market in the European Union and less than a percentage point in the U.S., largely because of different fuel-taxation and emissions regimes. Carburetors have been regulated out of most developed markets because fuel injection — originally a more costly technology — results in less tailpipe pollution. China’s auto industry plan released in April envisages new energy vehicles — including electric and hybrids — making up all the future sales growth in the country. With conventional cars plateauing at current levels, new-energy vehicle sales will reach 7 million annually in 2025. As many as 800,000 charging stations will be built this year alone, according to the official China Daily. Government mandates will require manufacturers to sell 8 percent of their vehicles with electric or hybrid powertrains from next year, or purchase credits to make up the difference, rising to 20 percent by 2025.

Oil Price: Iraq Faces Civil War Threat

…click on the above link to read the rest of the article…

World Out Of Whack: Electricity YAY!

World Out Of Whack: Electricity YAY!

Britain to ban sale of all diesel and petrol cars and vans from 2040

So says the Guardian.

Which follows on from:

France to ban sales of petrol and diesel cars by 2040

This follows Norway, The Netherlands, Germany and now – the big Daddy…

China plans to ban sales of fossil fuel cars entirely

China is the world’s largest auto market, with 28.03 million vehicles sold last year, a boost in demand of 13.7 percent vs. 2015 sales numbers. The nation has already done a lot to incentivize manufacturers to develop and sell new EVs, including allowing foreign automakers to create a third joint venture with local automakers (a standard requirement for doing business in the country for auto OEMs) so long as it’s dedicated to the creation of EVs exclusively.

CO2 emissions from EVs are substantially lower than their fossil-fuel-guzzling cousins. And since most of us prefer swallowing our air without having to chew it first, the appeal is as easy to understand as Cameron Diaz in a bikini.

Here’s an excellent chart which you can go and play around with which shows vehicle emissions. The yellow are the EVs (click the chart):

http://carboncounter.com
Source: http://carboncounter.com

This news has tree-hugging beardies everywhere rejoicing because they will, once and for all, get rid of all those ghastly baby-seal-murdering bastard oil and gas executives.

Two Things Worth Thinking About Here

  1. If EVs take over the planet, prevent air pollution, cease the destruction of the short-eared owl’s habitat, and cure halitosis, surely more electricity will be required, no?
  2. And secondly, if the internal combustion engine is going to prop up landfills, then what exactly goes into making these EVs? Because being a simple guy I couldn’t help stop and do simple math. That is: if car (a) being satan’s transport (diesel, of course) is replaced with car (b) the unicorn rainbow (EV), surely there will be massive demand for all the stuff that makes up car (b).

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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