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You assume a constant price for gasoline, which is a bold assumption, given that the oil markets are currently gyrating wildly, and have been for some time - we

You assume a constant price for gasoline, which is a bold assumption, given that the oil markets are currently gyrating wildly, and have been for some time - we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale, which will provide a big push towards EV adoption, and will drive people away from older vehicles which guzzle gas. No, it isn't going to be overnight, but like most transitions, it's going to happen far more quickly than you think. In 1905 people thought that most people would still be using horses in a century, that cars were just too expensive and niche, that horses were good enough. Horses were obsolete within 15 years of private automobiles being a thing - by 1920 more freight was hauled and more passenger-miles were travelled by internal combustion than horse, in the US. EVs have been around for seven years, in a "real" form, give or take, their adoption rate is similar to that of the original gasoline automobiles when compared to horses. I give it seven more years before they're dominant. I'm also putting my money where my mouth is, and I've been buying up nice dirt cheap houses on busy, noisy, polluted roads. They'll be nice, not so cheap houses on less busy, quiet, clean roads in fifteen years.

steve19 11y ago
> we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale Do you really believe that in a short period of time gasoline is going to cost a few orders of magnitude more... that's 1,000x the current cost? Post-fracking that's unlikely to happen. Prices may return to previous levels, but they won't move much more than that. Alternative energy will reduce demand for oil and therefor depress the price of oil, not the other way around.
- madaxe_again 11y ago
  Orders of magnitude doesn't mean 1000x - just 10x is enough. As to fracking - the wheels have already fallen off, low oil prices forced a production hiatus, stop/start is inefficient and costly, and you need only look at the headlong rush in the UK that kinda petered out to get an idea of where fracking is going - nowhere. The fossil sector is in big, big trouble - this chaotic oscillator will not stop until the market decouples from energy. The only question is whether they'll be allowed to collapse, or if we'll see state bailouts that keep them limping along. As to reduced demand - that's also part of the problem. Oil prices are not purely demand driven, they have costs to meet, shareholders to appease, and massive capital investment needs that will not be met with a suppressed price, which will feed the death spiral they've been in for some five years now.
  - pessimizer 11y ago
    > Orders of magnitude doesn't mean 1000x - just 10x is enough. That's "order" of magnitude, not "orders."
    - deleted 11y ago
      [deleted]
    - Retric 11y ago
      It's a vague term as: Other orders of magnitude may be calculated using bases other than 10. https://en.wikipedia.org/wiki/Order_of_magnitude https://en.wikipedia.org/wiki/Order_of_magnitude In base 2, 2x = 1 order of magnitude 8x = 3 orders of magnitude. Worse both informal definitions are in common usage.
    - madaxe_again 11y ago
      11x would be "orders", if we're playing semantic pedantry.
  - TheCowboy 11y ago
    Where are you getting the information that stop/start is inefficient and costly for fracking? It's less than conventional oil wells. I've found a significant cost of fracking is establishing the wells. If the price goes up that much, fracking is viable and will happen. The only way fracking is out of the equation if when low prices keep it from being profitable. Fracking presently functions as a cap on the price. If prices vary wildly, then there are strategies to deal with that, and the variation needs to be explained. How does it come down so rapidly? Assuming healthy economics, probably because of fracking. It doesn't make sense to say that market prices aren't demand driven just because other costs and factors exist. If suppliers will lose money at a given low price because of costs, eventually supply decreases and prices rise, etc.
    - madaxe_again 11y ago
      Info mostly comes from banter with energy market traders who are getting ready for a mixture of feast and bloodbath. I used to work a futures desk, mostly on intermediates. I got a decent sense of the market in those few years, and watching it is an ongoing pastime. Re: the specifics around fracking start/stop - it's staff. You either retain salaried workers who are unproductive for stretches, or you work contractors, which is expensive. Either way it drives up cost. Re the demand driven bit - I explained that poorly. Oil is a very "special" commodity, in that it has spectacular investment costs, incredible levels of state funding (and debt), and a price determined by anticipated demand more than anything else I'm aware of - you need only look at the volume curve across futures to see this - and the fact that we are still in a contango market. This adds up to the price of oil being driven by overall economic growth forecasts, which are theoretically demand, but aren't. This results in expenditure (exploration and exploitation), which has a several year time lag. Fracking has been oh-jesus expensive and may never turn a profit. Investors (states) are getting shy. I'm still explaining this poorly - I'd need to write an essay to convey what I'm trying to get at - there are a few dynamics at play and I will be amazed if we don't start seeing even more instability. Confidence in the market is very, very low. Talk to traders, not what the press says. Of course the press says it's rosy - nobody wants a premature sell-off, even if there could be some tasty dead cats in it for the vultures. We still need oil for energy for the time being.
- frgewut 11y ago
  If your closest gas pump is 20 miles away fuel cost wouldn't matter anyway. I also expect that a lot of pumps will be closed in cities because of pollution, smells and other factors.
- greedo 11y ago
  He's just being foolishly hyperbolic with the term "magnitude." He even uses hedge words to protect his oracular status.
jblok 11y ago
Interesting idea buying property on busy roads, but why would they become less busy solely because of electric cars? Yes, they may be quieter and cleaner, but you still have the eyesore of a road, and the associated people that roads bring.
- madaxe_again 11y ago
  Because with EVs we will see the rise of autonomous vehicles - once you have a car that is run by a computer and powered by electricity, and self-driving tech is available and affordable, it becomes a no-brainer. Once autonomous vehicles become prevalent, traffic volume should drop, as we'll see less car ownership and more car use, meaning fewer cars parking, better traffic flow, etc. I believe the future of road transport is going to be something very like uber, just with no human drivers, and cars that only ever stop to recharge and to let passengers in and out. The latter part of the equation (autonomy and associated behavioural changes) will take longer than the transition to EVs, and will happen, barring legislation fighting it. As to the eyesore bit - I should clarify - I've been buying property on polluted, busy, pretty roads. Think A-roads in town centres, with houses on one side and a park on the other.
  - 05 11y ago
    > Once autonomous vehicles become prevalent, traffic volume should drop That's simply not true; not only will SDCs create 'empty miles' of 0-passenger cars, but they will make people more comfortable with longer commutes (you can sleep on the way to work now), and with average commute getting longer we'll get more passenger-miles. Sharing won't really pick up (except on the low end, displacing public transport) because SDCs are pretty cheap as is, and people generally prefer their personal space unmolested by others.
    - madaxe_again 11y ago
      As I said, "more car use" - I.e. More passenger miles - but you can still paradoxically have less traffic volume, as journies become more efficient but more importantly as freight becomes more efficient. Re: the personal space bit... Not so sure. Many of the "younger" generation spurn car ownership so have no sunk costs, no personal space to lose. For the rest, it's going to be a question of marginal utility - and the fact that many car owners will get a train preferably where possible suggests that there is a case for non-ownership. I mean, ten years ago your man on the street would have found it inconceivable that they would own no movies, no albums, that they'd just rent them - yet here we are. Behaviour changes quickly when it starts, but slowly enough that you don't notice the change until after the event.
brooklyndavs 11y ago
The irony, or market working I guess, is that as demand for gas and fossil fuel goes down so does the price. This keeps the incentive to keep burning gas. During this recent price drop larger vehicle sales with worse gas mileage increased. I live in a city myself and its hard to realize this when all you see are smaller cars around, but in suburban, rural, Texas, larger gas vehicle are still the rule vs the exception it seems. > Horses were obsolete within 15 years of private automobiles being a thing - by 1920 more freight was hauled and more passenger-miles were travelled by internal combustion than horse, in the US. I'm not quite sure the analogy fits exactly. This is because the production (breeding?) of horses wasn't the most profitable industry man has every created. Remember still some of the most profitable companies in the world are fossil fuel companies. Exxon is still #2 and Chevron is #5. Also, unlike a company like Apple, they have been this way for decades. Brutal dictators are propped from oil. Entire countries rely on oil for their very existence. Due the the shear amount of money involved I do not see fossil fuels going quietly into the night based on market forces alone. As long as they are cheaper and more convenient for humanity we will use them. What we really need, in my opinion, is to #1 end the ridiculous subsidies that fossil fuel companies get and #2 enact a carbon tax where we give the proceeds of this tax to fund renewable energy research and to help out the millions of workers who will loss their jobs from the transition off of fossil fuels. Here's another way of looking at it. In the 90s we had the big tobacco thing. 7 of these executives lied under oath that tobacco wasn't addictive. After countless hearings, lawsuits with rewards of the billions of $$$, high use taxes around the world, some of these companies are still around. People still use their products. They are expanding into emerging countries, vaping and maybe even weed. They are using trade protections to expand into those emerging markets. Now take an industry, make it more profitable and give it millions of federal tax breaks and subsidies. Oh and instead of an economy of say Virginia or North Carolina based off of it have economies like Russia, Saudi Arabia, Qatar, Nigeria owe their development from it. I'm not saying we can't migrate off of fossil fuels. It needs to happen, and happen very quickly. However, its important to understand the shear size of the problem at hand.
- madaxe_again 11y ago
  I just posted a reply elsewhere in this tree that expounds my thinking on oil. In short, I think uncertainty and credit risk will cause the oil market to collapse rather sooner than most anticipate. Read up on the current contango oil market - it's unnerving stuff.
mizchief2 11y ago
I see the daily-commuter car for dad going electric very quickly in your prototypical family of for. Electric car for the daily drive then still have a truck or SUV for mom to use on short trips during the day and for long drives beyond the range of a charge.
greedo 11y ago
Gotta call BS. Gas in my area is currently $2/gal. I think it's highly unlikely to go up "orders of magnitude" in a short timescale, unless you're intentionally using weasel words. There's plenty of oil around, wells are being capped due to oversupply/drop in demand.
- ams6110 11y ago
  Agree. And in inflation adjusted dollars, gasoline is about as cheap as it's ever been.
- kleiba 11y ago
  Lucky you -- where I live, gas is currently $5.48/gal and that's on the cheap end.
  - greedo 11y ago
    How much of that is tax?
    - kleiba 11y ago
      Most of it.
- philovivero 11y ago
  I think the "orders of magnitude" phrase was a misunderstanding of exactly how large an order of magnitude is. Probably meant "an order of magnitude." I could see gas jumping to $20/gal pretty quickly if things go wrong in the right way.
  - greedo 11y ago
    Short of a revolution in Saudi Arabia, or something along those lines, oil/gas costs aren't going to go up 10x. Although gas isn't perfectly linked to oil prices, a barrel of oil isn't going to hit $450 anytime soon. There's far too much accessible oil at under $100/barrel for this to occur.
rhino369 11y ago
>You assume a constant price for gasoline, which is a bold assumption, given that the oil markets are currently gyrating wildly, and have been for some time - we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale, which will provide a big push towards EV adoption, and will drive people away from older vehicles which guzzle gas. If anything the move towards electric car adoption will make gasoline less expensive. Oil isn't running out anytime soon. We already have the distribution and refinement infrastructure. Saudi Arabia and other oil producing countries will want to sell the oil they have before the market disappears. Maybe in 100 years when gas cars go extinct, gasoline would be expensive. But for the time being, it's not going to massively jump in price.
- madaxe_again 11y ago
  http://www.salon.com/2016/04/29/there_will_be_pandemonium_partner/ http://www.salon.com/2016/04/29/there_will_be_pandemonium_pa... You were saying?
fweespee_ch 11y ago
> You assume a constant price for gasoline, which is a bold assumption, given that the oil markets are currently gyrating wildly, and have been for some time - we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale, which will provide a big push towards EV adoption, and will drive people away from older vehicles which guzzle gas. Sorry, that isn't likely. We have basically "infinite" (50+ years worth) of Oil @ $100 [1] [2] [3] a barrel which is why all those shale wells came online when oil was priced higher. We've already been ~$100 for years at a time. Similarly, the shift to greener technologies is going to put downward pressure on it once it is back to the ~$100 baseline from years past. [1] http://www.bloomberg.com/news/articles/2016-02-03/texas-toughness-in-oil-patch-shows-why-u-s-still-strong-at-30 http://www.bloomberg.com/news/articles/2016-02-03/texas-toug... [2] http://www.forbes.com/sites/rrapier/2016/02/29/the-break-even-cost-for-shale-oil/#76f96ccee792 http://www.forbes.com/sites/rrapier/2016/02/29/the-break-eve... [3] http://www.cnbc.com/2015/08/20/us-crude-oils-break-even-cost-how-low-can-it-go.html http://www.cnbc.com/2015/08/20/us-crude-oils-break-even-cost...

steve19 11y ago

> we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale Do you really believe that in a short period of time gasoline is going to cost a few orders of magnitude more... that's 1,000x the current cost? Post-fracking that's unlikely to happen. Prices may return to previous levels, but they won't move much more than that. Alternative energy will reduce demand for oil and therefor depress the price of oil, not the other way around.

madaxe_again 11y ago
Orders of magnitude doesn't mean 1000x - just 10x is enough. As to fracking - the wheels have already fallen off, low oil prices forced a production hiatus, stop/start is inefficient and costly, and you need only look at the headlong rush in the UK that kinda petered out to get an idea of where fracking is going - nowhere. The fossil sector is in big, big trouble - this chaotic oscillator will not stop until the market decouples from energy. The only question is whether they'll be allowed to collapse, or if we'll see state bailouts that keep them limping along. As to reduced demand - that's also part of the problem. Oil prices are not purely demand driven, they have costs to meet, shareholders to appease, and massive capital investment needs that will not be met with a suppressed price, which will feed the death spiral they've been in for some five years now.
- pessimizer 11y ago
  > Orders of magnitude doesn't mean 1000x - just 10x is enough. That's "order" of magnitude, not "orders."
  - deleted 11y ago
    [deleted]
  - Retric 11y ago
    It's a vague term as: Other orders of magnitude may be calculated using bases other than 10. https://en.wikipedia.org/wiki/Order_of_magnitude https://en.wikipedia.org/wiki/Order_of_magnitude In base 2, 2x = 1 order of magnitude 8x = 3 orders of magnitude. Worse both informal definitions are in common usage.
  - madaxe_again 11y ago
    11x would be "orders", if we're playing semantic pedantry.
- TheCowboy 11y ago
  Where are you getting the information that stop/start is inefficient and costly for fracking? It's less than conventional oil wells. I've found a significant cost of fracking is establishing the wells. If the price goes up that much, fracking is viable and will happen. The only way fracking is out of the equation if when low prices keep it from being profitable. Fracking presently functions as a cap on the price. If prices vary wildly, then there are strategies to deal with that, and the variation needs to be explained. How does it come down so rapidly? Assuming healthy economics, probably because of fracking. It doesn't make sense to say that market prices aren't demand driven just because other costs and factors exist. If suppliers will lose money at a given low price because of costs, eventually supply decreases and prices rise, etc.
  - madaxe_again 11y ago
    Info mostly comes from banter with energy market traders who are getting ready for a mixture of feast and bloodbath. I used to work a futures desk, mostly on intermediates. I got a decent sense of the market in those few years, and watching it is an ongoing pastime. Re: the specifics around fracking start/stop - it's staff. You either retain salaried workers who are unproductive for stretches, or you work contractors, which is expensive. Either way it drives up cost. Re the demand driven bit - I explained that poorly. Oil is a very "special" commodity, in that it has spectacular investment costs, incredible levels of state funding (and debt), and a price determined by anticipated demand more than anything else I'm aware of - you need only look at the volume curve across futures to see this - and the fact that we are still in a contango market. This adds up to the price of oil being driven by overall economic growth forecasts, which are theoretically demand, but aren't. This results in expenditure (exploration and exploitation), which has a several year time lag. Fracking has been oh-jesus expensive and may never turn a profit. Investors (states) are getting shy. I'm still explaining this poorly - I'd need to write an essay to convey what I'm trying to get at - there are a few dynamics at play and I will be amazed if we don't start seeing even more instability. Confidence in the market is very, very low. Talk to traders, not what the press says. Of course the press says it's rosy - nobody wants a premature sell-off, even if there could be some tasty dead cats in it for the vultures. We still need oil for energy for the time being.
frgewut 11y ago
If your closest gas pump is 20 miles away fuel cost wouldn't matter anyway. I also expect that a lot of pumps will be closed in cities because of pollution, smells and other factors.
greedo 11y ago
He's just being foolishly hyperbolic with the term "magnitude." He even uses hedge words to protect his oracular status.

jblok 11y ago

Interesting idea buying property on busy roads, but why would they become less busy solely because of electric cars? Yes, they may be quieter and cleaner, but you still have the eyesore of a road, and the associated people that roads bring.

madaxe_again 11y ago
Because with EVs we will see the rise of autonomous vehicles - once you have a car that is run by a computer and powered by electricity, and self-driving tech is available and affordable, it becomes a no-brainer. Once autonomous vehicles become prevalent, traffic volume should drop, as we'll see less car ownership and more car use, meaning fewer cars parking, better traffic flow, etc. I believe the future of road transport is going to be something very like uber, just with no human drivers, and cars that only ever stop to recharge and to let passengers in and out. The latter part of the equation (autonomy and associated behavioural changes) will take longer than the transition to EVs, and will happen, barring legislation fighting it. As to the eyesore bit - I should clarify - I've been buying property on polluted, busy, pretty roads. Think A-roads in town centres, with houses on one side and a park on the other.
- 05 11y ago
  > Once autonomous vehicles become prevalent, traffic volume should drop That's simply not true; not only will SDCs create 'empty miles' of 0-passenger cars, but they will make people more comfortable with longer commutes (you can sleep on the way to work now), and with average commute getting longer we'll get more passenger-miles. Sharing won't really pick up (except on the low end, displacing public transport) because SDCs are pretty cheap as is, and people generally prefer their personal space unmolested by others.
  - madaxe_again 11y ago
    As I said, "more car use" - I.e. More passenger miles - but you can still paradoxically have less traffic volume, as journies become more efficient but more importantly as freight becomes more efficient. Re: the personal space bit... Not so sure. Many of the "younger" generation spurn car ownership so have no sunk costs, no personal space to lose. For the rest, it's going to be a question of marginal utility - and the fact that many car owners will get a train preferably where possible suggests that there is a case for non-ownership. I mean, ten years ago your man on the street would have found it inconceivable that they would own no movies, no albums, that they'd just rent them - yet here we are. Behaviour changes quickly when it starts, but slowly enough that you don't notice the change until after the event.

brooklyndavs 11y ago

The irony, or market working I guess, is that as demand for gas and fossil fuel goes down so does the price. This keeps the incentive to keep burning gas. During this recent price drop larger vehicle sales with worse gas mileage increased. I live in a city myself and its hard to realize this when all you see are smaller cars around, but in suburban, rural, Texas, larger gas vehicle are still the rule vs the exception it seems. > Horses were obsolete within 15 years of private automobiles being a thing - by 1920 more freight was hauled and more passenger-miles were travelled by internal combustion than horse, in the US. I'm not quite sure the analogy fits exactly. This is because the production (breeding?) of horses wasn't the most profitable industry man has every created. Remember still some of the most profitable companies in the world are fossil fuel companies. Exxon is still #2 and Chevron is #5. Also, unlike a company like Apple, they have been this way for decades. Brutal dictators are propped from oil. Entire countries rely on oil for their very existence. Due the the shear amount of money involved I do not see fossil fuels going quietly into the night based on market forces alone. As long as they are cheaper and more convenient for humanity we will use them. What we really need, in my opinion, is to #1 end the ridiculous subsidies that fossil fuel companies get and #2 enact a carbon tax where we give the proceeds of this tax to fund renewable energy research and to help out the millions of workers who will loss their jobs from the transition off of fossil fuels. Here's another way of looking at it. In the 90s we had the big tobacco thing. 7 of these executives lied under oath that tobacco wasn't addictive. After countless hearings, lawsuits with rewards of the billions of $$$, high use taxes around the world, some of these companies are still around. People still use their products. They are expanding into emerging countries, vaping and maybe even weed. They are using trade protections to expand into those emerging markets. Now take an industry, make it more profitable and give it millions of federal tax breaks and subsidies. Oh and instead of an economy of say Virginia or North Carolina based off of it have economies like Russia, Saudi Arabia, Qatar, Nigeria owe their development from it. I'm not saying we can't migrate off of fossil fuels. It needs to happen, and happen very quickly. However, its important to understand the shear size of the problem at hand.

madaxe_again 11y ago
I just posted a reply elsewhere in this tree that expounds my thinking on oil. In short, I think uncertainty and credit risk will cause the oil market to collapse rather sooner than most anticipate. Read up on the current contango oil market - it's unnerving stuff.

mizchief2 11y ago

I see the daily-commuter car for dad going electric very quickly in your prototypical family of for. Electric car for the daily drive then still have a truck or SUV for mom to use on short trips during the day and for long drives beyond the range of a charge.

greedo 11y ago

Gotta call BS. Gas in my area is currently $2/gal. I think it's highly unlikely to go up "orders of magnitude" in a short timescale, unless you're intentionally using weasel words. There's plenty of oil around, wells are being capped due to oversupply/drop in demand.

ams6110 11y ago
Agree. And in inflation adjusted dollars, gasoline is about as cheap as it's ever been.
kleiba 11y ago
Lucky you -- where I live, gas is currently $5.48/gal and that's on the cheap end.
- greedo 11y ago
  How much of that is tax?
  - kleiba 11y ago
    Most of it.
philovivero 11y ago
I think the "orders of magnitude" phrase was a misunderstanding of exactly how large an order of magnitude is. Probably meant "an order of magnitude." I could see gas jumping to $20/gal pretty quickly if things go wrong in the right way.
- greedo 11y ago
  Short of a revolution in Saudi Arabia, or something along those lines, oil/gas costs aren't going to go up 10x. Although gas isn't perfectly linked to oil prices, a barrel of oil isn't going to hit $450 anytime soon. There's far too much accessible oil at under $100/barrel for this to occur.

rhino369 11y ago

madaxe_again 11y ago
http://www.salon.com/2016/04/29/there_will_be_pandemonium_partner/ http://www.salon.com/2016/04/29/there_will_be_pandemonium_pa... You were saying?

fweespee_ch 11y ago

> You assume a constant price for gasoline, which is a bold assumption, given that the oil markets are currently gyrating wildly, and have been for some time - we're likely to see prices at the pump go up by orders of magnitude over a relatively short timescale, which will provide a big push towards EV adoption, and will drive people away from older vehicles which guzzle gas. Sorry, that isn't likely. We have basically "infinite" (50+ years worth) of Oil @ $100 [1] [2] [3] a barrel which is why all those shale wells came online when oil was priced higher. We've already been ~$100 for years at a time. Similarly, the shift to greener technologies is going to put downward pressure on it once it is back to the ~$100 baseline from years past. [1] http://www.bloomberg.com/news/articles/2016-02-03/texas-toughness-in-oil-patch-shows-why-u-s-still-strong-at-30 http://www.bloomberg.com/news/articles/2016-02-03/texas-toug... [2] http://www.forbes.com/sites/rrapier/2016/02/29/the-break-even-cost-for-shale-oil/#76f96ccee792 http://www.forbes.com/sites/rrapier/2016/02/29/the-break-eve... [3] http://www.cnbc.com/2015/08/20/us-crude-oils-break-even-cost-how-low-can-it-go.html http://www.cnbc.com/2015/08/20/us-crude-oils-break-even-cost...