7 ms·

is it posssible fossil fuels are becoming cheaper because clean enegery is expanding

by systems 11y ago

eliben 11y ago
It's probably not the main reason (technology improvements in oil extraction is), but it sure doesn't hurt!
toomuchtodo 11y ago
No, the two are disconnected. Oil is getting cheaper because the House of Saud is attempting to drive out frackers in the US. Jokes on them though: That oil is always going to be profitable around $50-60/barrel. Once the Sauds lower production to raise the price of oil back up, frackers will fire right back up. It'll take 12-18 months, but it'll still happen. Almost no one burns petroleum for electricity mind you (nat gas, yes, but not oil) except Hawaii and parts of Alaska, and they're moving as fast as possible to renewables because of price spikes that occur occasionally. So you're going to see this seesaw effect. Oil shoots up, more oil comes onto the market, oil goes back down, etc. Renewables. Oh how I love me some renewables. There's this legislation, the production tax credit [1]. It generously subsidizes the installation of renewables in the US. There's always been this quagmire though, as Congress would only extend it 1 year at a time (hard to plan capital expenditures worth billions when the legislation you're relying on is always up in the air). But things changed in December of last year. At the end of 2015, in a landmark deal, Congress extended it for 5 years, and in return, the US lifted export restrictions on crude oil. That means that solar and wind is going to roll out faster than ever. Natural gas will push out the remaining 30% of coal fired generation in the US, and wind and solar will fill the gaps (this is good; natural gas is cleaner, and produces much less CO2 per MWH produced). As more wind and solar comes online, along with utility scale battery storage, we'll reduce our reliance on natural gas (protip: don't invest long-term in generators who own substantial nat gas generation assets). China is deploying wind at an astonishing rate, faster than even nuclear [2]. They're heavily subsidizing electric vehicles now as well [3]. The price of coal is plummeting (which is good!) [4]. The best case scenario is whatever is left of it is left in the ground. If you can afford it, elect to get renewables from your utility. The premium should be ~1-3 cents/kwh. If you can afford to get an electric car, and it makes sense for your lifestyle, do so. If it doesn't, use a carshare program. Collective effort can change the status quo. [1] http://energy.gov/savings/renewable-electricity-production-tax-credit-ptc http://energy.gov/savings/renewable-electricity-production-t... [2] http://www.earth-policy.org/data_highlights/2015/highlights50 http://www.earth-policy.org/data_highlights/2015/highlights5... [3] http://www.ibtimes.com/chinese-consumers-bought-nearly-300-more-electric-cars-year-compared-2014-2222591 http://www.ibtimes.com/chinese-consumers-bought-nearly-300-m... [4] https://www.quandl.com/collections/markets/coal https://www.quandl.com/collections/markets/coal
- sliverstorm 11y ago
  Coal mining is also rather destructive, so I suppose it would be nice to leave some in the ground. I do wonder if there will be other uses that don't release carbon, as coal is a big carbon sink.
- noobiemcfoob 11y ago
  Thanks for this post! well reasoned and well written!
  - toomuchtodo 11y ago
    Thank you!
- krschultz 11y ago
  I agree with your facts but disagree with your assessment. I believe that the drop in clean energy prices is what drove the crash in oil prices. The reason the Saudis are trying to drive the frackers out of business is because the Saudis no longer believe that we're going to get all the oil out of the ground before clean energy takes over. Previously they were fine cutting their own production in order to maintain a particular price because they were certain that eventually ALL of the oil in Saudi Arabia would get sold on the global market. If that took 100 years, that actually was even better for them. If you believed in peak oil, then being the last one standing with reserves actually would be awesome. With clean energy beating projections it looks like we're not going to burn every drop of oil in the Earth. Given that, the Saudis are no longer patient. If they hold back their reserves to maintain a particular price it's very possible we'll get off oil before we run out of oil. Thus the Saudis would have left money on the table if they didn't shift strategy. It seems like their new strategy is to extract every dollar they can for their oil reserves. In the short term that means fighting off the frackers, but the broader picture looks like a race to the bottom for all oil producers. The good news is I don't think we're going to burn all the oil on Earth. The bad news is low oil will slow down the rollout of clean energy because it makes ROI worse.
  - toomuchtodo 11y ago

is it posssible fossil fuels are becoming cheaper because clean enegery is expanding

by systems 11y ago

is it posssible fossil fuels are becoming cheaper because clean enegery is expanding

eliben 11y ago

It's probably not the main reason (technology improvements in oil extraction is), but it sure doesn't hurt!

toomuchtodo 11y ago

No, the two are disconnected. Oil is getting cheaper because the House of Saud is attempting to drive out frackers in the US. Jokes on them though: That oil is always going to be profitable around $50-60/barrel. Once the Sauds lower production to raise the price of oil back up, frackers will fire right back up. It'll take 12-18 months, but it'll still happen. Almost no one burns petroleum for electricity mind you (nat gas, yes, but not oil) except Hawaii and parts of Alaska, and they're moving as fast as possible to renewables because of price spikes that occur occasionally. So you're going to see this seesaw effect. Oil shoots up, more oil comes onto the market, oil goes back down, etc. Renewables. Oh how I love me some renewables. There's this legislation, the production tax credit [1]. It generously subsidizes the installation of renewables in the US. There's always been this quagmire though, as Congress would only extend it 1 year at a time (hard to plan capital expenditures worth billions when the legislation you're relying on is always up in the air). But things changed in December of last year. At the end of 2015, in a landmark deal, Congress extended it for 5 years, and in return, the US lifted export restrictions on crude oil. That means that solar and wind is going to roll out faster than ever. Natural gas will push out the remaining 30% of coal fired generation in the US, and wind and solar will fill the gaps (this is good; natural gas is cleaner, and produces much less CO2 per MWH produced). As more wind and solar comes online, along with utility scale battery storage, we'll reduce our reliance on natural gas (protip: don't invest long-term in generators who own substantial nat gas generation assets). China is deploying wind at an astonishing rate, faster than even nuclear [2]. They're heavily subsidizing electric vehicles now as well [3]. The price of coal is plummeting (which is good!) [4]. The best case scenario is whatever is left of it is left in the ground. If you can afford it, elect to get renewables from your utility. The premium should be ~1-3 cents/kwh. If you can afford to get an electric car, and it makes sense for your lifestyle, do so. If it doesn't, use a carshare program. Collective effort can change the status quo. [1] http://energy.gov/savings/renewable-electricity-production-tax-credit-ptc http://energy.gov/savings/renewable-electricity-production-t... [2] http://www.earth-policy.org/data_highlights/2015/highlights50 http://www.earth-policy.org/data_highlights/2015/highlights5... [3] http://www.ibtimes.com/chinese-consumers-bought-nearly-300-more-electric-cars-year-compared-2014-2222591 http://www.ibtimes.com/chinese-consumers-bought-nearly-300-m... [4] https://www.quandl.com/collections/markets/coal https://www.quandl.com/collections/markets/coal

sliverstorm 11y ago
Coal mining is also rather destructive, so I suppose it would be nice to leave some in the ground. I do wonder if there will be other uses that don't release carbon, as coal is a big carbon sink.
noobiemcfoob 11y ago
Thanks for this post! well reasoned and well written!
- toomuchtodo 11y ago
  Thank you!
krschultz 11y ago
I agree with your facts but disagree with your assessment. I believe that the drop in clean energy prices is what drove the crash in oil prices. The reason the Saudis are trying to drive the frackers out of business is because the Saudis no longer believe that we're going to get all the oil out of the ground before clean energy takes over. Previously they were fine cutting their own production in order to maintain a particular price because they were certain that eventually ALL of the oil in Saudi Arabia would get sold on the global market. If that took 100 years, that actually was even better for them. If you believed in peak oil, then being the last one standing with reserves actually would be awesome. With clean energy beating projections it looks like we're not going to burn every drop of oil in the Earth. Given that, the Saudis are no longer patient. If they hold back their reserves to maintain a particular price it's very possible we'll get off oil before we run out of oil. Thus the Saudis would have left money on the table if they didn't shift strategy. It seems like their new strategy is to extract every dollar they can for their oil reserves. In the short term that means fighting off the frackers, but the broader picture looks like a race to the bottom for all oil producers. The good news is I don't think we're going to burn all the oil on Earth. The bad news is low oil will slow down the rollout of clean energy because it makes ROI worse.
- toomuchtodo 11y ago