Oil Needs to Fall Below $20 to Compete With Green Alternatives • Hacker News Board

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

#61

Post by donkeyd » Mon, Aug 05, 2019, 12:45 PM UTC

dsfyu404ed wrote: post #53

Brakenshire wrote: post #43

Earlier quoted context omitted.

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 o…

Taxis and buses will be electrified quickly because it makes a lot of sense As long as OTR trucking's primary regulatory irritants are weight and working hours it will resist electrification (unless electric somehow magically becomes so dirt cheap to run that it makes up for the limitations).

> irritants are weight and working hours

Working hours could actually be beneficial in Europe. Drivers require regular breaks over here. If batteries and chargers can sync with the required break cycle, then there's no reason not to go electric.

However, I do think that charging infrastructure will be the main issue, seeing as often tens of trucks will be at the same stop, they'll need a lot of power to get all of them charged within their breaks. Because existing rest stops don't seem located near power lines, that might be a challenge.

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

#62

Post by theklub » Mon, Aug 05, 2019, 12:49 PM UTC

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…

Have you ever heard of Saddam Hussein? There were many reasons to invade.

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

#63

Post by Brakenshire » Mon, Aug 05, 2019, 12:52 PM UTC

kartickv wrote: post #59

Does this take the higher cost of EVs into account?

It’s looking at the cost of EVs over a 25 year time period, so I presume for a new vehicle which is bought in 2045. EVs are expensive now because of battery costs, but battery costs have consistently fallen by 20-30% over the last ten years, and the trend is expected to continue.

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

#64

Post by romaaeterna » Mon, Aug 05, 2019, 1:16 PM UTC

Brakenshire wrote: post #56

romaaeterna wrote: post #46

Earlier quoted context omitted.

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.

Your argument is about today, but the analysis is about 25 years time, i.e. the scale of long term oil investments.

My argument was about electric cars displacing gas. I'm curious why you think I'm talking about today, when they are 2% of the current market.

As far as the long-term prospect goes, it's very hard to say yet whether electric cars will replace enough of the gas infrastructure to drive down total oil demand.

On balance, I think not. If users were especially price conscious about their fuel usage, high-efficiency vehicles would be a bigger share of the market. They aren't. And beyond fuel efficiency, electric vehicles offer consumers very little that gas vehicles do not, and have very serious drawbacks that are unlikely to go away.

Given the current state of electric vehicle performance, vanishing tax incentives, and incomplete infrastructure. I think that the American consumer is going to pull back from this 2% dalliance with electric vehicles with its hands badly burned. It might be another generation before they make another attempt at a comeback.

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

#65

Post by ThomPete » Mon, Aug 05, 2019, 1:21 PM UTC

JumpCrisscross wrote: post #60

ThomPete wrote: post #51

Earlier quoted context omitted.

The cost needs to be divided out on other things than just for energy, thats the point.

> The cost needs to be divided out on other things than just for energy A barrel which costs $50 to produce will cost $50 to produce regardless of its use. There is no "dividing out" costs.

Of course there is as the cost goes to other things than for energy which is the comparison. Its not $20 per area oil can be used, its $20 divided out on all the things its used for.

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

#66

Post by tialaramex » Mon, Aug 05, 2019, 1:40 PM UTC

Brakenshire wrote: post #50

dsfyu404ed wrote: post #41

Earlier quoted context omitted.

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.

People tend to assume that 100MWh less energy from oil means 100MWh more electricity for the same transport need, but ICE is horribly inefficient so that's not how it works. Most of the energy in that oil is just wasted, an efficient conversion would be too heavy and expensive for a motor vehicle, and oil is so energy rich you get plenty of performance without bothering.

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

#67

Post by gleglegle » Mon, Aug 05, 2019, 1:41 PM UTC

romaaeterna wrote: post #38

gnode wrote: post #34

Earlier quoted context omitted.

The argument is that oil via combustion engine vehicles compete against renewables/gas/hydro/nuclear via battery-powered electric vehicles in a single transportation energy economy.

If electric vehicles were to displace gas vehicles, then oil would be displaced by grid electricity. But gas vehicles remain very competitive against electric vehicles on total cost of ownership, even with oil prices far higher than $20/barrel. And since gas is so much easier to transport, gas vehicles have numerous technical advantages. If electric vehicles do not fully displace gas vehicles, then this article is wr…

The total cost of ownership trend for electric vehicle declining. Not only in energy costs, but most drastically on manufacturing costs. Estimates like BNEF’s show that manufacturing costs will reach parity with internal combustion vehicles within the next decade.

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

#68

Post by Brakenshire » Mon, Aug 05, 2019, 1:59 PM UTC

romaaeterna wrote: post #64

Brakenshire wrote: post #56

Earlier quoted context omitted.

Your argument is about today, but the analysis is about 25 years time, i.e. the scale of long term oil investments.

My argument was about electric cars displacing gas. I'm curious why you think I'm talking about today, when they are 2% of the current market. As far as the long-term prospect goes, it's very hard to say yet whether electric cars will replace enough of the gas infrastructure to drive down total oil demand. On balance, I think not. If users were especially price conscious about their fuel usage, high-efficiency vehicl…

> But gas vehicles remain very competitive against electric vehicles on total cost of ownership, even with oil prices far higher than $20/barrel.

This is mostly true but irrelevant, because as I say the linked analysis is about 25 years.

> If electric vehicles do fully displace gas vehicles, the article is still wrong, because oil will not be competitive with grid energy even at $20/barrel.

That is close to analysis they have done, if anticipated cost reductions for EVs continue over that 25 year period, oil will have to be priced at $9 a barrel to undercut it for that market segment.

> Given the current state of electric vehicle performance, vanishing tax incentives, and incomplete infrastructure. I think that the American consumer is going to pull back from this 2% dalliance with electric vehicles with its hands badly burned.

Sounds like motivated reasoning, to be honest. People will almost certainly drive what is cheaper, all the more so in America where consumption is high. The mechanisms driving reductions in cost are assisted but not driven by the US market, the transition is happening in the EU and in China, which gives scale, which reduces cost. As that happens, whole classes of vehicles will fall below the equivalent gasoline TCO.

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

#69

Post by DocTomoe » Mon, Aug 05, 2019, 2:20 PM UTC

tristanperry wrote: post #55

tim333 wrote: post #48

In the UK we have large taxes on oil as fuel (57.95 p duty + ~ 20p VAT on a litre), large subsidies for renewables, oil prices up to $80/barrel and still most people drive petrol or diesel vehicles.

Sure, and whilst this is _slowly_ changing, a large part is the high up-front cost. A Kia e-Niro is £32,995 (including the recently cut Government subsidy) whilst a similar size+spec petrol car (The Kia Rio 3) is £17,285. The Nissan Leaf is from £27,995 whilst the larger Qashqai is from £19,995. I know that the up-front cost issue is similar in many countries, but that's where Government subsidies usually kick in. Am…

I don't care about the cost of the vehicle, I care about not having a place where I can load it. Parking is next to the road, and no electrical outlets exist there. Parking at the job is a new parking garage - again without electrical outlets.

An electric car would be useful to me for about 400 km before it runs dry - that's about four days of driving for me.

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

#70

Post by romaaeterna » Mon, Aug 05, 2019, 2:23 PM UTC

Brakenshire wrote: post #68

romaaeterna wrote: post #64

Earlier quoted context omitted.

My argument was about electric cars displacing gas. I'm curious why you think I'm talking about today, when they are 2% of the current market. As far as the long-term prospect goes, it's very hard to say yet whether electric cars will replace enough of the gas infrastructure to drive down total oil demand. On balance, I think not. If users were especially price conscious about their fuel usage, high-efficiency vehicl…

> But gas vehicles remain very competitive against electric vehicles on total cost of ownership, even with oil prices far higher than $20/barrel. This is mostly true but irrelevant, because as I say the linked analysis is about 25 years. > If electric vehicles do fully displace gas vehicles, the article is still wrong, because oil will not be competitive with grid energy even at $20/barrel. That is close to analysis…

> People will almost certainly drive what is cheaper, all the more so in America where consumption is high.

Which is why hybrids and small cars dominate the American market? Fuel consciousness is only one thing driving purchasing decisions, and not the most important.

Americans could well decide to continue buying cars that can go on long journeys, don't have costly battery replacement issues, and don't take an hour to refuel at a special station.