When oil is no longer in demand • Hacker News Board

Re: When oil is no longer in demand

#11

Post by mjevans » Wed, Nov 30, 2016, 11:50 PM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

Probably temporarily. It'll likely cross a point where more synthetic production methods reach economic viability.

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.

Re: When oil is no longer in demand

#12

Post by nickff » Wed, Nov 30, 2016, 11:51 PM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

Jet fuel is more similar to Diesel than gasoline. Different oil wells produce varying mixtures of fuels; I would expect 'sweet' (gasoline-rich) crude to decrease in price much more than heavier crudes, as the demand for the latter is likely to persist for longer, though we may also see shifts in the types of fuels being used.

Re: When oil is no longer in demand

#13

Post by drawkbox » Wed, Nov 30, 2016, 11:52 PM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

> Of the 7.13 billion barrels of total U.S. petroleum product consumption in 2015, 47% was motor gasoline (includes ethanol), 20% was distillate fuel (heating oil and diesel fuel), and 8% was jet fuel, 4% plastics.[1]

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...

Re: When oil is no longer in demand

#14

Post by stoic » Wed, Nov 30, 2016, 11:53 PM UTC

The recent market conditions are more a consequence of changes in supply than in demand.

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

Re: When oil is no longer in demand

#15

Post by user5994461 » Wed, Nov 30, 2016, 11:54 PM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

If the price go down, people will travel more, increasing the demand and the price of oil.

It's self-stabilizing.

Re: When oil is no longer in demand

#16

Post by peterjlee » Wed, Nov 30, 2016, 11:56 PM UTC

joshaidan wrote: post #7

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

Or would it potentially increase the supply of Jet A (jet fuel), as less oil needs to be converted to automobile fuel.

Is the refining process flexible enough to do that? I was under the impression that refining is more of a separation process so the amount of each petroleum product you get is already determined by the petroleum you have before you even start the process.

Re: When oil is no longer in demand

#17

Post by edblarney » Thu, Dec 01, 2016, 12:00 AM UTC

shanemhansen wrote: post #4

I live in Utah and I can tell you exactly what happens when oil is no longer in demand. They offer numerous tax breaks per well to encourage exploration and increase production. I believe the term is "corporate welfare". One of the tax breaks has a stated goal of providing tax relief when oil prices are low. https://oilgas.ogm.utah.gov/pub/Publications/Lists/tax_incen... This is the same government attempting to roll…

'Tax breaks' are offered to all sorts of industries.

Almost all entertainment in Canada for example, is done nearly tax free. Pharma, energy, small business etc. etc..

Re: When oil is no longer in demand

#18

Post by ARothfusz » Thu, Dec 01, 2016, 12:02 AM UTC

moomin wrote: post #9

melling wrote: post #6

Earlier quoted context omitted.

Yeah, it's crazy that people think oil is going away. We're 7 billion people on our way to 9 billion, with another billion in the next 15 years. That fossil free future that we dream about isn't getting any closer. Those big solar plants, etc that we read about are a rounding error.

You're right. The price going down has, I think, more to do with the effect of fracking in the US. It's getting to the point that the US could be an exporter if it changed its laws. The effect of petro-states will be much the same, though.

We are an oil exporter. We did change the laws. http://money.cnn.com/2016/06/06/investing/us-oil-exports-inc...

Re: When oil is no longer in demand

#19

Post by Scoundreller » Thu, Dec 01, 2016, 12:03 AM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

> I wonder what will happen to the price of jet fuel once electric cars are wide spread.

Probably the same thing that happened to coal, it just gets used elsewhere.

Historically used for heating, trains and ships

Re: When oil is no longer in demand

#20

Post by mikeash » Thu, Dec 01, 2016, 12:05 AM UTC

peterjlee wrote: post #5

I wonder what will happen to the price of jet fuel once electric cars are wide spread. Petroleum production will go down as demand for gasoline will go down while jet fuel demand will probably remain similar. So will that lead to a rise in jet fuel price?

You can see this at work already with gasoline for small planes, which commands a huge premium over automotive gasoline now. Around here, the cost is 2x higher or more. The premium used to be smaller, but when gas prices came down from their $4 high, avgas didn't really follow.