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

#71

Post by [deleted] » Mon, Aug 05, 2019, 2:25 PM UTC

sseveran wrote: post #57

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…

Maybe this will come to pass but the market currently does not believe so, at least in the 10 year time frame. A 2030 Oil Futures Contract is priced right around $54 this morning. If we end up in a world where oil is no longer needed, yes some people will lose a bunch of money. But capital is also going to be freed up to invest in new things. I don't think that anyone thinks the oil industry is the same as 50 years a…

[deleted]

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

#72

Post by toomuchtodo » Mon, Aug 05, 2019, 2:35 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.

An old NREL report from about 5-10 years ago is floating around somewhere that shows that ~77% of light vehicles (ie cars) in the US can be transitioned to electric without any additional grid generation capacity.

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

#73

Post by Brakenshire » Mon, Aug 05, 2019, 3:09 PM UTC

romaaeterna wrote: post #70

Brakenshire wrote: post #68

Earlier quoted context omitted.

> 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…

They will go for the cheaper option all else being the same.

Battery replacement actually isn’t an issue for EVs with good thermal management. There’s already plenty of data out there for Teslas which indicate very few battery problems, no more than the kind of occasional drivetrain failures you get with internal combustion cars. The idea that owners will have to replace batteries as a matter or course was valid for some early and basic cars, but is clearly not an issue any more for most vehicles, and no vehicle at the premium end.

Short range and charging is an issue depending on what segment of the market you’re talking about. The current state of the art, which will likely be normal in 5-10 years, is 6 hours of driving for 35 minutes of charging. And, of course, the car starts the day full. That will be a restriction for a part of the market, but you’re claiming 2% is an overextension, which seems manifestly unlikely to me.

EV’s have other benefits as well, not least the immediate torque and acceleration, which has previously been a differentiator.

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

#74

Post by gnode » Mon, Aug 05, 2019, 3:14 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…

> And since gas is so much easier to transport, gas vehicles have numerous technical advantages.

Typically one needs to drive to a gas station to refuel a gas vehicle, whereas an electric vehicle can be recharged at any mains power outlet.

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

#75

Post by siffland » Mon, Aug 05, 2019, 3:18 PM UTC

Brakenshire wrote: post #63

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.

It would be nice to see the long term expected prices of EV's vs gasoline powered vehicles. Currently you can buy a cheap gasoline vehicle and years of gas for the cost of an equvilent EV.

Also i read all this gloom and doom about lithum reserves and how long they will last and how sustainable it is to the point i dont know what to believe. So are the batteries going to get more expensive as countries with lithium reserves realize what they have and start charging more?

I wish i could afford an EV or a hybrid, but they are out of my price range.

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

#76

Post by ThomPete » Mon, Aug 05, 2019, 3:51 PM UTC

Which green alternatives gives us:

A multitude of materials (ex plastic in multiple shapes forms and solidness & nylon), energy (not just electricity), pesticides (no matter what you think of them they still make sure we are fed) lubricants.

I could go on. When we extract oil we don't just extract gasoline for our cars and houses we use it for so many things that simply doesn't have any alternatives.

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

#77

Post by kartickv » Tue, Aug 06, 2019, 1:23 AM UTC

Brakenshire wrote: post #63

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.

Thanks, but if it's over a 25-year time period, shouldn't we consider the price of an EV bought at the beginning of the time period, not the end?

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

#78

Post by JackPoach » Tue, Aug 06, 2019, 8:37 AM UTC

Brakenshire wrote: post #29

JackPoach wrote: post #23

Oil primary use is as motor fuel for cars, trucks, planes and ships, and it's also used a a feedstock for the chemical industry. Renewables haven't been successful in either yet. This article assumes that electric cars are going to take off and replace internal combustion engines, which may not happen after all.

The report is assuming that road transport will go to whichever technology is cheaper, and that current learning rates for batteries and wind/solar will continue for the next 25 years.

Yeah, it's kind of like assuming that all religions will die in 25 years, because everyone will be 'rational'.

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

#79

Post by thiago_fm » Fri, Aug 16, 2019, 8:21 PM UTC

Brakenshire wrote: post #36

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…

> So that means, you need a battery. The price of the battery, its decay and so on, has to be taken into account That is the analysis they have done. > If everybody would go electric Today, the price of a battery would go to infinity, as there is not enough supply for that demand. I don’t understand why this is relevant, they are talking about a comparison for projected costs in 25 years, there’s plenty of time for b…

Maybe there isn't even enough lithium to power cars for the next 25 years. They either flop the market completely with new technology, or this will fail badly.

It is possible to create electric cars nowadays, but as we live in a capitalistic society we forget easily that we don't have unlimited resources on this planet. Lithium is still more rare than oil. I don't see how this is sustainable at all.