Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Oil Needs to Fall Below $20 to Compete With Green Alternatives

bloomberg.com

Post reply on HN
Print view View original

41–50 of 79 posts

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#41

Post by dsfyu404ed »

runeks wrote: post #30
Brakenshire wrote: post #15

The worry is that oil companies are making investments now for 10, 20 or 30 years into the future and not taking into account the realities of making a return. There are all sorts of long term capital costs for setting up oil fields, refineries, pipelines and so on, and then marginal costs for each barrel thereafter. Under a scenario of total road transport electrification, demand would be drastically reduced, meanin…

> Under a scenario of total road transport electrification [...] I think 30-year oil investments are relatively safe if this is their threat. I can’t see this happening in less than 30 years.

Yeah. For starters you need some serious grid improvements just about everywhere. That's not a 10yr or 20yr effort because the replacement cycle on most of that equipment is far more than ten or twenty years.

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#42

Post by mamon »

AlanSE wrote: post #10
marble-drink wrote: post #7

Earlier quoted context omitted.

Not quite. Oil and its derivatives are also subject to heavy subsidies and taxation. These "corrections" are supposed to take into account external costs and benefits that wouldn't be otherwise in the price but, unfortunately, it is also susceptible to corruption. In the case of oil the external costs are so large that taxation can completely take its competitive edge.

Claiming that oil is subsidized is a tired trope. Yes you can argue that the Iraq War was done for oil, it's just not a strong argument. Many oil producing nations use oil revenue to subsidize everything else they (the government) wants, so the subsidy argument stands on weak footing for both consuming and producing nations. Oil has unpaid for economic externalities, specifically climate change. This is not the same…

>> Yes you can argue that the Iraq War was done for oil, it's just not a strong argument.

If it wasn't for oil, then for what? Those chemical weapons that were never found? All wars that US starts (and 80 percent of all wars in the world are started by US) are either for oil, or other economic interests. "Spreading democracy" is just an excuse used by government's public relations division, but it is not even remotely true. There are many non-democratic countries, which US leave alone, because they have not enough natural resources or other wealth to be taken from them to pay the bill for war - Cuba is one such example.

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#43

Post by Brakenshire »

runeks wrote: post #30
Brakenshire wrote: post #15

The worry is that oil companies are making investments now for 10, 20 or 30 years into the future and not taking into account the realities of making a return. There are all sorts of long term capital costs for setting up oil fields, refineries, pipelines and so on, and then marginal costs for each barrel thereafter. Under a scenario of total road transport electrification, demand would be drastically reduced, meanin…

> Under a scenario of total road transport electrification [...] I think 30-year oil investments are relatively safe if this is their threat. I can’t see this happening in less than 30 years.

I’d say personally total electrification won’t happen for a long time, if ever, but there will be major markets, notably China and the EU, which are substantially electrified over a 30 year timescale.

You also have to bear in mind that electrification is most attractive for vehicles which travel the most distance, and consume the most fuel. Even 20% electrification of the fleet will have a massively outsized impact on oil consumption if it represents all taxis, buses, long distance commuters, road freight, etc. See Bloomberg’s previous research about displacement of fuel from buses:

https://www.bloomberg.com/news/articles/2019-03-19/forget-te...

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#44

Post by navigatesol »

Brakenshire wrote: post #15

The worry is that oil companies are making investments now for 10, 20 or 30 years into the future and not taking into account the realities of making a return. There are all sorts of long term capital costs for setting up oil fields, refineries, pipelines and so on, and then marginal costs for each barrel thereafter. Under a scenario of total road transport electrification, demand would be drastically reduced, meanin…

>The worry is that oil companies are making investments now for 10, 20 or 30 years into the future and not taking into account the realities of making a return.

Do you really believe that hundred-year-old companies aren't planning their future? Sure, some companies will fail (they always do), but others adapt. Every oil company is well aware of the effects and politics of climate change, and most have massive renewable investment in the works. What gives you the slightest idea that you see something that "they" don't?

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#45

Post by perfunctory »

thiago_fm wrote: post #27

What people need to have in mind is that oil, when compared with solar/wind power, acts both as a storage for energy(battery) and also the power/energy itself. So that means, you need a battery. The price of the battery, its decay and so on, has to be taken into account in that price. Does that aforementioned price for the barrel of oil includes that? I think not. If everybody would go electric Today, the price of a…

> I believe consumers will still buy cars powered by oil as long as it is worth it.

As long as it is legal

https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehic...

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#46

Post by romaaeterna »

Brakenshire wrote: post #26
romaaeterna wrote: post #22

> new wind and solar energy projects combined with battery-powered electric vehicles Less than 0.3% of electricity in the US is generated by oil (in 2018). The proper comparison for wind/solar for grid energy would be against natural gas/nuclear/hydropower.

The report is comparing petrol/diesel against solar/wind plus batteries specifically in the context of road transport.

See my reply to gnode. But clearly solar/wind should not have been mentioned at all. They are talking about competing with grid electricity in that case, and making a very unlikely argument.

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#47

Post by olau »

runeks wrote: post #30
Brakenshire wrote: post #15

The worry is that oil companies are making investments now for 10, 20 or 30 years into the future and not taking into account the realities of making a return. There are all sorts of long term capital costs for setting up oil fields, refineries, pipelines and so on, and then marginal costs for each barrel thereafter. Under a scenario of total road transport electrification, demand would be drastically reduced, meanin…

> Under a scenario of total road transport electrification [...] I think 30-year oil investments are relatively safe if this is their threat. I can’t see this happening in less than 30 years.

Are you sure? The total road transport electrification scenario means falling demand for a long time, probably with a relatively steep part somewhere. I would certainly not want to bet on something requiring a thirty-year horizon to be profitable in that kind of market.

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#49

Post by navigatesol »

mamon wrote: post #42
AlanSE wrote: post #10

Earlier quoted context omitted.

Claiming that oil is subsidized is a tired trope. Yes you can argue that the Iraq War was done for oil, it's just not a strong argument. Many oil producing nations use oil revenue to subsidize everything else they (the government) wants, so the subsidy argument stands on weak footing for both consuming and producing nations. Oil has unpaid for economic externalities, specifically climate change. This is not the same…

>> Yes you can argue that the Iraq War was done for oil, it's just not a strong argument. If it wasn't for oil, then for what? Those chemical weapons that were never found? All wars that US starts (and 80 percent of all wars in the world are started by US) are either for oil, or other economic interests. "Spreading democracy" is just an excuse used by government's public relations division, but it is not even remotel…

>If it wasn't for oil, then for what? Those chemical weapons that were never found?

You have a pretty simplified political view, my friend.

Iraq sells oil into a market; how did invading them "get us the oil"?

Re: Oil Needs to Fall Below $20 to Compete With Green Alternatives

#50

Post by Brakenshire »

dsfyu404ed wrote: post #41
runeks wrote: post #30

Earlier quoted context omitted.

> Under a scenario of total road transport electrification [...] I think 30-year oil investments are relatively safe if this is their threat. I can’t see this happening in less than 30 years.

Yeah. For starters you need some serious grid improvements just about everywhere. That's not a 10yr or 20yr effort because the replacement cycle on most of that equipment is far more than ten or twenty years.

The grid is built to handle peak demand, and electric vehicles will mostly be charged off-peak and in particular overnight when there is substantial surplus capacity on the grid, so the need to increase grid capacity will not be as significant as you might think.
Post reply on HN