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"Generation’s best-known analysis is its 2013 report asserting that coal and petroleum reserves were “stranded assets” whose theoretical market value would neve
by zbyte64 11y ago
"Generation’s best-known analysis is its 2013 report asserting that coal and petroleum reserves were “stranded assets” whose theoretical market value would never be realized, because environmental, legal, technological, and market constraints would inevitably prevent much of that carbon from being sold and burned."
That might be another motivating factor for the Saudi's to sell their oil cheaply. Sell as much as you can now because the future market will be more hostile.
- adventured 11y agoFrom time to time they talk about it candidly, the recognition that the electric vehicle shift poses a huge threat to oil demand as a whole (typically interwoven with a discussion on solar or renewables in general). All sorts of knock-on effects occur if you remove 1/3 of a market. Saudi has around ~268 billion barrels of oil. They're producing at 10.x million barrels per day currently (let's say 3.8 billion barrels per year). Estimated reserves are almost always wrong to the low side, at least in the prior century projections were overwhelmingly that way. Saudi might have a century of oil production left at these levels. I think I'd be happily selling it cheap today as well (and considering their cost basis), I wouldn't want to be dependent on oil in 40 or 50 years, much less 100.
- barney54 11y agoThe challenge is that there isn't a single car company making money on electric vehicles. Even Tesla selling their cars at around $100k is still seldom profitable (and when they are it's because of selling credits). It's tough to say that EVs are the future when it isn't clear that anyone can make money selling them.
- nqzero 11y agopart of why they're not profitable is because of the saudis dumping oil, which may well be part of their motivation
- ams6110 11y agoHow is that part of why they're (EV manufacturers) not profitable?
- knappe 11y agoEasy. There is zero incentive to build a better car when the one you can buy now is so cheap. This is why in the States, SUV sales follow gas prices [0]. [0] - http://www.npr.org/2015/01/05/375201451/car-sales-surged-in-december-capping-a-good-year-for-the-industry http://www.npr.org/2015/01/05/375201451/car-sales-surged-in-...
- mc32 11y agoThat speaks to the "operating" costs not to the initial "investment" to get the vehicle off the dealer lot. Why can't a manufacturer make a profitable vehicle which is also affordable for the consumer, even at the high-end of the market?
- coupdetaco 11y agoThe demand for electric vehicles is in part a function of gas prices. The Saudis are cashing out because they feel it is advantageous to keep those prices low and undermine the appeal of alternative energy sources
- kaitai 11y agoI have heard this theory from several folks on Wall Street. It is an intriguing lens to look at their behavior with.
- snowwrestler 11y agoThe Saudi oil minister has essentially said as much. The quote was something like "The stone age did not end for a lack of stones, and the oil age will not end for a lack of oil."