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Is it possible that oil prices will never be that high again due to renewables? Part of me feels like the games OPEC members are playing will be to their long t

Is it possible that oil prices will never be that high again due to renewables? Part of me feels like the games OPEC members are playing will be to their long term detriment. Renewable cost is only going down year after year, really the oil states have a limited time to extract as much money as possible before alt energy kicks into high gear. By the time they're done fighting with each other it may be too late to get the money that they are banking on. Also bets on whether any member countries actually follow this?

_FKS_ 10y ago
Renewables depend on oil. You can't make renewables with renewables energy, because their overall EROI is insufficient to both maintain the current standard of life, and make them. The other issue is mobility, oil has the best volume/energy content ratio of all energy sources we know (except uranium). Renewables can only make electricity and you need about 10x the same battery volume (and weight) to move a vehicle, compared to oil. Unfourtunately for all of us, fosil fuels are here to stay for a while, until they run out. Or until the economy crashes. Or until climate change kicks in real bad.
- danmaz74 10y ago
  > Renewables can only make electricity If renewable energy becomes abundant/cheap enough, you can convert electricity into hydrogen or other high energy density chemicals.
  - vkou 10y ago
    Hydrogen is a nightmare to work with, and store. Other high energy-density chemicals tend to be complex hydrocarbons... So you're still burning oil - it just happens to be made from coal, or algae slush, or whatnot.
    - Neeek 10y ago
      Algae slush is carbon coming from our current system, our current atmosphere, it is renewable. Fossil fuel is releasing carbon from and external source (external on a human timescale at least). It will be essential in creating a renewable replacement for oil. Burning hydrocarbons is not the issue. Burning hydrocarbons that were extracted from the atmosphere millions of years ago, is.
  - ArkyBeagle 10y ago
    If I had to insure transportation of a gas for energy storage, I'd make it methane. LNG is pretty safe. But right now, there's plenty of natural gas around.
- icebraining 10y ago
  Renewables depend on oil. You can't make renewables with renewables energy, because their overall EROI is insufficient to both maintain the current standard of life, and make them. Currently, sure, but in the long term? How so? The other issue is mobility, oil has the best volume/energy content ratio of all energy sources we know (except uranium). "Sustainable fuel for the transportation sector": https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1821126/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1821126/
philipkglass 10y ago
I'd say say that transport electrification is going to be more directly responsible for reducing oil demand. It's very important to the climate that electric vehicles get charged with low-emissions sources, but the petrostates are equally in trouble whether people are driving EVs charged with wind power or coal power. It's hard to tell when electrification is going to kick into high gear. Projections for numbers of EVs sold ten years from now vary widely. I'll say that if oil did go back over $100/barrel that would provide an incredible tail wind for PHEV and BEV adoption in the US. Cars last 20+ years but buyers are oddly sensitive to recent pump prices.
- sokoloff 10y ago
  I don't expect my 2015 LEAF to be on the road in 2035. The current generation of battery electrics do not have 20 year battery packs, and I don't know that it will be worthwhile to re-battery the car twice to get to the 20 year mark with good range and the way the battery tech is improving. (I'd probably rather buy a new BEV 8 years from now, even though I'm normally the guy who buys a 6-10 year old car and drives it 6-10 years.) I do agree that people all but throwing away large SUVs when gas hit the mid $4 range was mystifying to me. I work with and hang around generally smart people and I saw people trading in 2-3 year old cars for brand-new fuel efficient cars.
eatmyshorts 10y ago
There are a couple of dynamics at play. In the long term (10+ year range), I believe you are correct, that renewables will begin to have a significant effect on oil prices as natural gas power plants are shut down and replaced with solar and wind (oil is used primarily for transportation, not energy production; natural gas is replacing coal as the primary fossil fuel used for generating electricity as natural gas prices remain lower than coal for extended periods). For the short term, though, I think fracking has a bigger impact on prices. Traditionally, oil prices had a long-term boom-bust cycle that lasted about 30 years...15 years of boom followed by 15 years of bust. This has been going on since the dawn of the oil industry, and is largely systemic: business cycles tend to be around 15 years, as in it takes about 10-15 years to go from discovery to production (gather data, drill exploration wells, drill production wells and production infrastructure). I'm not sure of any other industry with so long of a systemic business cycle. Now, however, fracking has changed the game. So far, since "tight gas" is so new, we're able to use fracking in oil fields that have already been developed, to extract gas and oil from areas we knew it was at before, but thought it was too hard to extract (the term for where fracking is used--"tight" refers to the permeability of the rock...traditional oil comes from sources measured in the 10s of darcies...fracking is often employed in areas with <0.001 darcies, like shale rock). This means that production facilities, like pipelines and whatnot, are already in place. Furthermore, the discovery process is shortened, as these are already fields with known reserves, just in areas that we could not extract from efficiently before. Now, with fracking, we can. This means the investment cycle has been reduced from 10-15 years to 1-2 years. With the old business cycle, new technology typically would be invented any time prices got high enough--generally following a business cycle where all of the "easy" oil has been found and extracted. New technology allows new fields to be produced "easily", causing a surplus of oil and a crash in oil prices. This continues until all the "easy" oil has been found, and the cycle continues. This cycle goes all the way back to the 1860s (whale blubber -> oil wells -> oil wells with pumps -> basic geology (drilling under hills) -> 2D seismic -> 3D seismic -> deep-sea/sub-salt -> fracking; pretty much follows a 20-30 year cycle). The concept of "peak oil" isn't new--people have been worried about peak oil since the mid-1800s. Analysts aren't sure if the new reality we're in has fundamentally changed the markets. I say it hasn't--the cycles will return after all of this new "easy" oil, in the form of shale gas/tight gas, has been exploited. But we're only somewhere about 2-5 years into a 15-year bust cycle, if you ask me. I would expect prices to hover in the $40-$50 range for the remainder of this bust cycle, with a few rare exceptions (wars, disasters, etc). After that, I think you'll see prices return to the $100+ level (in 2016 terms--since the 1860s, prices have cycled pretty consistently between $10 and $100 for a barrel of oil, in 2016 terms) until the next technological revolution in oil exploration and production occurs. But it does mean less volatility in prices as business cycles shorten--at least for the remainder of this bust cycle. Maybe peak oil will become a reality right as demand for oil drops, making the next round of technology advances unnecessary.

_FKS_ 10y ago

Renewables depend on oil. You can't make renewables with renewables energy, because their overall EROI is insufficient to both maintain the current standard of life, and make them. The other issue is mobility, oil has the best volume/energy content ratio of all energy sources we know (except uranium). Renewables can only make electricity and you need about 10x the same battery volume (and weight) to move a vehicle, compared to oil. Unfourtunately for all of us, fosil fuels are here to stay for a while, until they run out. Or until the economy crashes. Or until climate change kicks in real bad.

danmaz74 10y ago
> Renewables can only make electricity If renewable energy becomes abundant/cheap enough, you can convert electricity into hydrogen or other high energy density chemicals.
- vkou 10y ago
  Hydrogen is a nightmare to work with, and store. Other high energy-density chemicals tend to be complex hydrocarbons... So you're still burning oil - it just happens to be made from coal, or algae slush, or whatnot.
  - Neeek 10y ago
    Algae slush is carbon coming from our current system, our current atmosphere, it is renewable. Fossil fuel is releasing carbon from and external source (external on a human timescale at least). It will be essential in creating a renewable replacement for oil. Burning hydrocarbons is not the issue. Burning hydrocarbons that were extracted from the atmosphere millions of years ago, is.
- ArkyBeagle 10y ago
  If I had to insure transportation of a gas for energy storage, I'd make it methane. LNG is pretty safe. But right now, there's plenty of natural gas around.
icebraining 10y ago
Renewables depend on oil. You can't make renewables with renewables energy, because their overall EROI is insufficient to both maintain the current standard of life, and make them. Currently, sure, but in the long term? How so? The other issue is mobility, oil has the best volume/energy content ratio of all energy sources we know (except uranium). "Sustainable fuel for the transportation sector": https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1821126/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1821126/

philipkglass 10y ago

I'd say say that transport electrification is going to be more directly responsible for reducing oil demand. It's very important to the climate that electric vehicles get charged with low-emissions sources, but the petrostates are equally in trouble whether people are driving EVs charged with wind power or coal power. It's hard to tell when electrification is going to kick into high gear. Projections for numbers of EVs sold ten years from now vary widely. I'll say that if oil did go back over $100/barrel that would provide an incredible tail wind for PHEV and BEV adoption in the US. Cars last 20+ years but buyers are oddly sensitive to recent pump prices.

sokoloff 10y ago
I don't expect my 2015 LEAF to be on the road in 2035. The current generation of battery electrics do not have 20 year battery packs, and I don't know that it will be worthwhile to re-battery the car twice to get to the 20 year mark with good range and the way the battery tech is improving. (I'd probably rather buy a new BEV 8 years from now, even though I'm normally the guy who buys a 6-10 year old car and drives it 6-10 years.) I do agree that people all but throwing away large SUVs when gas hit the mid $4 range was mystifying to me. I work with and hang around generally smart people and I saw people trading in 2-3 year old cars for brand-new fuel efficient cars.

eatmyshorts 10y ago

There are a couple of dynamics at play. In the long term (10+ year range), I believe you are correct, that renewables will begin to have a significant effect on oil prices as natural gas power plants are shut down and replaced with solar and wind (oil is used primarily for transportation, not energy production; natural gas is replacing coal as the primary fossil fuel used for generating electricity as natural gas prices remain lower than coal for extended periods). For the short term, though, I think fracking has a bigger impact on prices. Traditionally, oil prices had a long-term boom-bust cycle that lasted about 30 years...15 years of boom followed by 15 years of bust. This has been going on since the dawn of the oil industry, and is largely systemic: business cycles tend to be around 15 years, as in it takes about 10-15 years to go from discovery to production (gather data, drill exploration wells, drill production wells and production infrastructure). I'm not sure of any other industry with so long of a systemic business cycle. Now, however, fracking has changed the game. So far, since "tight gas" is so new, we're able to use fracking in oil fields that have already been developed, to extract gas and oil from areas we knew it was at before, but thought it was too hard to extract (the term for where fracking is used--"tight" refers to the permeability of the rock...traditional oil comes from sources measured in the 10s of darcies...fracking is often employed in areas with <0.001 darcies, like shale rock). This means that production facilities, like pipelines and whatnot, are already in place. Furthermore, the discovery process is shortened, as these are already fields with known reserves, just in areas that we could not extract from efficiently before. Now, with fracking, we can. This means the investment cycle has been reduced from 10-15 years to 1-2 years. With the old business cycle, new technology typically would be invented any time prices got high enough--generally following a business cycle where all of the "easy" oil has been found and extracted. New technology allows new fields to be produced "easily", causing a surplus of oil and a crash in oil prices. This continues until all the "easy" oil has been found, and the cycle continues. This cycle goes all the way back to the 1860s (whale blubber -> oil wells -> oil wells with pumps -> basic geology (drilling under hills) -> 2D seismic -> 3D seismic -> deep-sea/sub-salt -> fracking; pretty much follows a 20-30 year cycle). The concept of "peak oil" isn't new--people have been worried about peak oil since the mid-1800s. Analysts aren't sure if the new reality we're in has fundamentally changed the markets. I say it hasn't--the cycles will return after all of this new "easy" oil, in the form of shale gas/tight gas, has been exploited. But we're only somewhere about 2-5 years into a 15-year bust cycle, if you ask me. I would expect prices to hover in the $40-$50 range for the remainder of this bust cycle, with a few rare exceptions (wars, disasters, etc). After that, I think you'll see prices return to the $100+ level (in 2016 terms--since the 1860s, prices have cycled pretty consistently between $10 and $100 for a barrel of oil, in 2016 terms) until the next technological revolution in oil exploration and production occurs. But it does mean less volatility in prices as business cycles shorten--at least for the remainder of this bust cycle. Maybe peak oil will become a reality right as demand for oil drops, making the next round of technology advances unnecessary.