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Big Oil Companies Should Adopt a Self-Liquidation Strategy

project-syndicate.org

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Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#101

Post by velik_m »

ksec wrote: post #88
jofer wrote: post #23

Whoever wrote this seems to be predicting the present while having no awareness of how the petroleum industry works. Yes, they've outlined what most majors are doing to different degrees in different areas. However, you're stupid not to keep your ability to operate when oil prices come back up. (Caveat: I'm an exploration geologist at a "western major", so I do have a somewhat slanted view.) First off, let's get some…

I think this is pretty much what he said in his previous article on pricing going lower. https://www.project-syndicate.org/commentary/oil-prices-ceil... Basically saying future pricing will stable at ~$50, anything higher will create opportunity for US Shale Oil companies, anything lower they will not be able to sustain their own economies. ( I actually said something similar / if not the same and got downvoted > Whi…

Maybe because most countries are running deficits - they would have to take out additional loans. I guess it's the same reason poor people buy crappy shoes instead of investing into quality long-term footwear - too many current problems to think of long-term solutions far in the future.

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#102

Post by diafygi »

> Mark Carney, Governor of the Bank of England, has warned that the stranded-asset problem could threaten global financial stability if the “carbon budgets” implied by global and regional climate deals render worthless fossil-fuel reserves that oil companies’ balance sheets currently value at trillions of dollars. This environmental pressure is now interacting with technological progress, reducing prices for solar energy to near-parity with fossil fuels.

I'm very interested to see some medium term outlooks (10-30 year) from the oil industry recently. Anyone have any? The stranded assets problem is already starting to wreak havoc on utilities[1]. If we can only burn about half or less of what currently exist in reserves[2], why isn't there more chatter about it on the medium or long term?

[1]: http://www.thestreet.com/story/14661/1/electric-utilities-st...

[2]: https://en.wikipedia.org/wiki/Carbon_bubble

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#103

Post by jofer »

ksec wrote: post #88
jofer wrote: post #23

Whoever wrote this seems to be predicting the present while having no awareness of how the petroleum industry works. Yes, they've outlined what most majors are doing to different degrees in different areas. However, you're stupid not to keep your ability to operate when oil prices come back up. (Caveat: I'm an exploration geologist at a "western major", so I do have a somewhat slanted view.) First off, let's get some…

I think this is pretty much what he said in his previous article on pricing going lower. https://www.project-syndicate.org/commentary/oil-prices-ceil... Basically saying future pricing will stable at ~$50, anything higher will create opportunity for US Shale Oil companies, anything lower they will not be able to sustain their own economies. ( I actually said something similar / if not the same and got downvoted > Whi…

In a nutshell, everyone has already bought all of the cheap oil they can store. There's a very small amount of storage globally compared to the size of the surplus. (It's not a small amount in absolute terms, it's just that the production surplus is currently very large.)

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#104

Post by danans »

_nedR wrote: post #90
iofj wrote: post #72

Earlier quoted context omitted.

Until battery tech gets within a decent percentage of a gas tank. Commercial batteries are currently worse than gas tanks, but catching up fast. If they get to 20% volume/weight/price of a gas tank I would predict a switch is going to happen very very fast. Currently commercial batteries are price limited (about the price of a gas tank + filling up the gas tank 400 times, which would keep a normal car moving for 5-10…

Its not just the batteries and cars. Can the grid really handle the huge increase in demand ? How much investment needs to be done to upgrade it? How long will that take?

The grid should be fine with a few upgrades and implementation of charging strategies:

"The short-term impacts for most utilities should be minimal and localized. There is a possibility, however, of isolated impacts on some distribution transformers and secondary drops, particularly in neighborhoods with older distribution systems including underground systems."

http://et.epri.com/Communications_Potential_Impacts_of_Vehic...

Edit: added quote.

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#105

Post by hueving »

iofj wrote: post #72
hueving wrote: post #70

Earlier quoted context omitted.

Solar, wind, and nuclear don't provide a threat to fuel used for transportation, which is a major percentage of how it's used.

Until battery tech gets within a decent percentage of a gas tank. Commercial batteries are currently worse than gas tanks, but catching up fast. If they get to 20% volume/weight/price of a gas tank I would predict a switch is going to happen very very fast. Currently commercial batteries are price limited (about the price of a gas tank + filling up the gas tank 400 times, which would keep a normal car moving for 5-10…

That won't cut it for industrial use (trucking, airlines, shipping, etc). For these things where fuel is a major cost, a swap to batteries is untenable until they are cheaper or equal either via heavy carbon taxes or an improvement in battery tech well beyond the 20% number you have in mind.

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#106

Post by hueving »

crdoconnor wrote: post #85
hueving wrote: post #70

Earlier quoted context omitted.

Solar, wind, and nuclear don't provide a threat to fuel used for transportation, which is a major percentage of how it's used.

Electricity is already way cheaper than gasoline per mile. All that's required for it to be an existential threat to gasoline is a drop in the price of battery tech (much like what happened to solar).

That's been true for a really, really long time. Battery tech being the limiting factor has been the issue since the first battery powered vehicle was invented in the late 1800s.

Re: Big Oil Companies Should Adopt a Self-Liquidation Strategy

#107

Post by ArleneBarlow »

iofj wrote: post #72
hueving wrote: post #70

Earlier quoted context omitted.

Solar, wind, and nuclear don't provide a threat to fuel used for transportation, which is a major percentage of how it's used.

Until battery tech gets within a decent percentage of a gas tank. Commercial batteries are currently worse than gas tanks, but catching up fast. If they get to 20% volume/weight/price of a gas tank I would predict a switch is going to happen very very fast. Currently commercial batteries are price limited (about the price of a gas tank + filling up the gas tank 400 times, which would keep a normal car moving for 5-10…

>If they get to 20% volume/weight/price of a gas tank I would predict a switch is going to happen very very fast.

What exactly are you saying here? Do you mean that battery would be 20% the volume or weight or price of a gas tank (extremely unlikely) or that it would be 20% in unit of volume per weight per price (i don't even know what that is) or in the later part you seem to imply 20% capacity (which unlike 20% weight,price,volume, would be a disadvantage).

it's very confusing

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