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

The Price of Oil Is About to Blow a Hole in Corporate Accounting

bloomberg.com

Post reply on HN
Print view View original

31–40 of 74 posts

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#31

Post by tptacek »

x0x0 wrote: post #20
jerf wrote: post #9

Well, if the stock market reacts by savaging the prices of these companies, sounds to me like a fantastic long-term investment opportunity will be opening up. However large this may be, it's still a transient price drop with a lot of politics in it, and in the long term prices are still only going to go back up. Most of that oil in the ground is still going to be pumped up at much higher prices, and not all that many…

You should look at the graph [1: the article, 2: a hotlink] labeled "Welcome to the Terrordome..." showing the prices of various oil sources vs solar over time. If the fantastic decline in solar prices continue, many oil sources will soon be not economical. And yes, I know there's storage problems and energy density problems for mobile vehicles, but oil is still a riskier bet than I think you portray. [1] http://www.…

This is pretty weak.

The reason solar-power generation will increasingly dominate: it’s a technology, not a fuel. As such, efficiency increases and prices fall as time goes on.

That's true of shale oil extraction as well.

The corresponding chart conflates all natural gas extraction under the "Henry Hub" label, and all crude extraction under "Brent". Meanwhile, it tries to show an exponential price decline in solar by starting the time series for solar energy costs in 2007. What are we meant to be comparing here?

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#32

Post by greglindahl »

adventured wrote: post #29
greglindahl wrote: post #27

Earlier quoted context omitted.

"If you switched all cars over to electric tomorrow" is not a useful scenario. In reality, the shift will take decades, and that's enough time for changes in the grid to happen.

Of course. The parent said this however: "From my point of view the only thing that stops us all from switching to electric cars is the battery technology." My obvious point was that, in fact, that is not even remotely the only thing stopping us from switching to electric cars. My scenario was extremely useful in highlighting the fact that we do not have the capacity to switch to an all-electric car approach, and not…

Huh. Well, the only thing I can suggest is that if you want to say that, that you say that, instead of what you said. Because no, that's not obvious from what you said, and no, people don't agree with your cost estimate. No "of course" involved.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#33

Post by dmix »

rcarrigan87 wrote: post #28

I bought some shares in an oil ETF a fews weeks ago my investment rationale was: 1. If the price stays low I win because my gas will be cheaper (essentially hedging my gas costs). If the price rises my cost at the pump will increase but will be offset some by gains on the ETF. 2. Geopolitical flares up typically drive oil prices higher. Low oil prices destabilize a lot of countries and increase the probability of the…

The middle east is where the vast majority of geopolitical conflict happens these days and the middle eastern powerhouses (Saudis, Iran, etc) are the ones driving the price down. I doubt they'd do this if it created a security risk internally.

So I'm curious what ripple effect you expect might happen as a result of this decline? South American oil countries? Africa?

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#34

Post by BostonEnginerd »

imaginenore wrote: post #14
jerf wrote: post #9

Well, if the stock market reacts by savaging the prices of these companies, sounds to me like a fantastic long-term investment opportunity will be opening up. However large this may be, it's still a transient price drop with a lot of politics in it, and in the long term prices are still only going to go back up. Most of that oil in the ground is still going to be pumped up at much higher prices, and not all that many…

You don't know that. The world is really on the way of getting rid of oil. Electric cars, bioplastics, solar panels getting exponentially cheap. From my point of view the only thing that stops us all from switching to electric cars is the battery technology. When it comes to the industrial use of solar energy, we already have the technology of storing energy - flywheel (google Beacon Power).

Unfortunately I don't think that Beacon is doing all that well. They recently had some layoffs.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#35

Post by crdoconnor »

SixSigma wrote: post #18
imaginenore wrote: post #14

Earlier quoted context omitted.

You don't know that. The world is really on the way of getting rid of oil. Electric cars, bioplastics, solar panels getting exponentially cheap. From my point of view the only thing that stops us all from switching to electric cars is the battery technology. When it comes to the industrial use of solar energy, we already have the technology of storing energy - flywheel (google Beacon Power).

> exponentially cheap Solar is following an exponential fall, but the tail has long been wagged http://io9.com/solar-powers-epic-price-drop-visualized-51044...

It's funny how the amount of FUD has shot up as the price has precipitously dropped:

* They're unreliable.

* The intermittency makes it impossible to use.

* It's unfair on the monopolistic power companies.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#36

Post by adventured »

greglindahl wrote: post #32
adventured wrote: post #29

Earlier quoted context omitted.

Of course. The parent said this however: "From my point of view the only thing that stops us all from switching to electric cars is the battery technology." My obvious point was that, in fact, that is not even remotely the only thing stopping us from switching to electric cars. My scenario was extremely useful in highlighting the fact that we do not have the capacity to switch to an all-electric car approach, and not…

Huh. Well, the only thing I can suggest is that if you want to say that, that you say that, instead of what you said. Because no, that's not obvious from what you said, and no, people don't agree with your cost estimate. No "of course" involved.

I did in fact say just that, in the comment you replied to I said:

"By the time all autos are switched to electric in 30 years"

You ignored what I said, and proceeded to tell me how the shift will take decades.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#37

Post by mikeash »

adventured wrote: post #29
greglindahl wrote: post #27

Earlier quoted context omitted.

"If you switched all cars over to electric tomorrow" is not a useful scenario. In reality, the shift will take decades, and that's enough time for changes in the grid to happen.

Of course. The parent said this however: "From my point of view the only thing that stops us all from switching to electric cars is the battery technology." My obvious point was that, in fact, that is not even remotely the only thing stopping us from switching to electric cars. My scenario was extremely useful in highlighting the fact that we do not have the capacity to switch to an all-electric car approach, and not…

If building up the grid to support 500 million electric cars only costs trillions, it sounds like an order of magnitude easier than the batteries.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#38

Post by hkmurakami »

dmix wrote: post #33
rcarrigan87 wrote: post #28

I bought some shares in an oil ETF a fews weeks ago my investment rationale was: 1. If the price stays low I win because my gas will be cheaper (essentially hedging my gas costs). If the price rises my cost at the pump will increase but will be offset some by gains on the ETF. 2. Geopolitical flares up typically drive oil prices higher. Low oil prices destabilize a lot of countries and increase the probability of the…

The middle east is where the vast majority of geopolitical conflict happens these days and the middle eastern powerhouses (Saudis, Iran, etc) are the ones driving the price down. I doubt they'd do this if it created a security risk internally. So I'm curious what ripple effect you expect might happen as a result of this decline? South American oil countries? Africa?

Russia.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#39

Post by adventured »

mikeash wrote: post #37
adventured wrote: post #29

Earlier quoted context omitted.

Of course. The parent said this however: "From my point of view the only thing that stops us all from switching to electric cars is the battery technology." My obvious point was that, in fact, that is not even remotely the only thing stopping us from switching to electric cars. My scenario was extremely useful in highlighting the fact that we do not have the capacity to switch to an all-electric car approach, and not…

If building up the grid to support 500 million electric cars only costs trillions, it sounds like an order of magnitude easier than the batteries.

Emphasis on tens of trillions and decades (not merely a few trillion).

Batteries are not a $30 trillion and 30 year problem, not even remotely close. Batteries are an order of a magnitude smaller of a problem.

We can build the Tesla S already. Musk is going to spend $5 billion building a plant that can produce 500,000+ car battery systems. We can already make effective battery systems for mainstream electric cars, the challenge now is to make them better and scale up manufacturing (which has already begun).

It costs $5 billion in the US just to build one major nuclear power plant.

I rarely see anybody discussing where the trillions of dollars in new spending is going to come from to boost energy supply and grid to handle 100 million electric cars in the US. It'll cost trillions just to maintain what we already have now over that time.

Re: The Price of Oil Is About to Blow a Hole in Corporate Accounting

#40

Post by mikeash »

adventured wrote: post #39
mikeash wrote: post #37

Earlier quoted context omitted.

If building up the grid to support 500 million electric cars only costs trillions, it sounds like an order of magnitude easier than the batteries.

Emphasis on tens of trillions and decades (not merely a few trillion). Batteries are not a $30 trillion and 30 year problem, not even remotely close. Batteries are an order of a magnitude smaller of a problem. We can build the Tesla S already. Musk is going to spend $5 billion building a plant that can produce 500,000+ car battery systems. We can already make effective battery systems for mainstream electric cars, th…

Right now, batteries for a realistic replacement car (not a compromise EV like a Leaf) cost about $20,000 per vehicle. That's $10 trillion for 500 million cars. It doesn't look an order of magnitude smaller to me.

As for where the money comes from, doesn't that just fall out of supply and demand? As demand for electricity increases, prices will go up, funding the infrastructure improvements needed to accommodate the increased demand.

The solution may not even lie in the grid. Batteries can solve the grid problem as well as the battery problem. Give every electric car customer enough solar to cover his charging needs and a fixed storage installation to keep the power for when the car comes home, and the grid won't even know the cars are there.

I'm sure this will all be wonderfully challenging for those involved, but it doesn't look like something to worry about from the outside.

Post reply on HN