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Does anyone know how the extraction cost of shale compare to the declining cost of solar? Are we at the point already where some oil fields become non-profitab

Does anyone know how the extraction cost of shale compare to the declining cost of solar? Are we at the point already where some oil fields become non-profitable?

OscarCunningham 9y ago
There are all sorts of subsidies and taxes everywhere, so it's hard to determine the true cost of either.
- melling 9y ago
  Can you please list some of them? The raging debate on renewables is that people intensely dislike subsidies for renewable energy. Other people respond that fossil fuels are also subsidized, without references. This “conversation” goes on endlessly with two sides basically talking at each other. Most people understand that coal is dirty, but with oil and natural gas it’s more difficult, for example, to convince people that moving to electric vehicles is a win.
  - ZeroGravitas 9y ago
    Here's a grumpy economist disagreeing with a famous IMF report on subsidies. I think he's wrong and the IMF is right. I'm really not sure why he's taking the tone he does, but it gives you both sides of the argument at least: https://www.forbes.com/sites/timworstall/2015/08/04/the-imfs-absurd-calculations-of-fossil-fuel-subsidies-its-really-not-2200-for-every-american/#54861b1222b6 https://www.forbes.com/sites/timworstall/2015/08/04/the-imfs...
  - marshray 9y ago
    This looks interesting: United States ‒ Progress Report on Fossil Fuel Subsidies https://www.treasury.gov/open/Documents/USA%20FFSR%20progress%20report%20to%20G20%202014%20Final.pdf https://www.treasury.gov/open/Documents/USA%20FFSR%20progres... There are a number of tax preferences, described below, available in the United States to producers of fossil fuels. The preferences below are all permanent provisions in the tax code.
  - diafygi 9y ago
    The largest fossil subsidy is the lack of a tax or regulation on greenhouse gas pollution. I used to work in emissions and most other types of air pollution (NOx, SOx, mercury, etc.) had either a permitting or cap-and-trade process that source emitters had to follow. These regulations were put in place to offset the cost of the externalities of those types of air pollution. For greenhouse gasses, it's only been recently that we even considered greenhouse gasses as pollution, and the EPA was actually starting to implement similar regulations (called Clean Power Plan). However, that is being rolled back by the Trump administration. So it looks like externalities subsidies will continue for the time being, at least on the federal level.
deleted 9y ago
[deleted]
robv 9y ago
That would be the levelized cost of energy (LCOE). One thing to consider which is not reflected in LCOE is baseload power needs or scaling power needs. The thing that really holds back solar is storage cost, not production. If solar could spread out it's power over 24 hours at the same cost. It would be game over in solar rich areas. https://en.m.wikipedia.org/wiki/Cost_of_electricity_by_source https://en.m.wikipedia.org/wiki/Cost_of_electricity_by_sourc...
nimos 9y ago
Oil and solar don't really compete that much. Oil - even at $40 a barrel - is substantively more expensive than pretty much everything else for generating electricity and is rarely used for anything beyond small scale generation. Oil is valuable because of gasoline/diesel which about 3/4 of the barrel goes to. It's all about the ease of transportation that ICE/gasoline/diesel offer that no other fuel can really compete on. The more relevant factor is the price of batteries which might make solar and other electricity sources viable competitors to oil.
- peterbecich 9y ago
  Very interesting. Incidentally, about 70% of Hawaii's electricity is generated with oil: https://en.wikipedia.org/wiki/Energy_in_Hawaii?wprov=sfla1 https://en.wikipedia.org/wiki/Energy_in_Hawaii?wprov=sfla1
  - petre 9y ago
    Doesn't geothermal work for Hawaii? It works just fine for the Azores.
    - peterbecich 9y ago
      You are correct; I didn't know about this for Hawaii: https://www.hawaiianelectric.com/clean-energy-hawaii/clean-energy-facts/renewable-energy-sources/geothermal https://www.hawaiianelectric.com/clean-energy-hawaii/clean-e...
yakitori 9y ago
> Does anyone know how the extraction cost of shale compare to the declining cost of solar? The solar market is so tiny it doesn't matter in the energy discussion. Despite what you read from the cheerleaders ( paid or unpaid ) on social media and the news. The two important changes in energy markets the last decade are fracking/shale oil and natural gas. That's it. > Are we at the point already where some oil fields become non-profitable? Solar doesn't determine profitability of oil field. Oil prices determine profitability of oil fields. And it's all variable depending on location/quality/etc of the oil fields and the oil. Yes, as oil prices drop, there are oil fields that became unprofitable and many oil fields were shuttered. As oil prices rise, they will become profitable and the activity will increase on those fields. Low oil prices and the rise of natural gas along with regulation has absolutely crushed coal markets in the last 10 years. It has also crushed the solar markets as well ( see all the solar companies going bankrupt ). Whether oil and gas can keep this trend going, your guess is good as mine. I think Trump is very pro-energy and he will support low oil prices, low LNG prices and even push for more coal investments. That won't bode well for solar. But what do I know.
- woodandsteel 9y ago
  >I think Trump is very pro-energy Trump is very pro-fossil fuel energy. He is doing everything he can to crush solar, wind, and EV's.
dragonwriter 9y ago
While solar is starting to represent a significant share of new generating capacity, it's not really material to the oil market, because they don't much directly compete for the same uses over the short term.

Does anyone know how the extraction cost of shale compare to the declining cost of solar? Are we at the point already where some oil fields become non-profitable?

OscarCunningham 9y ago

There are all sorts of subsidies and taxes everywhere, so it's hard to determine the true cost of either.

melling 9y ago
Can you please list some of them? The raging debate on renewables is that people intensely dislike subsidies for renewable energy. Other people respond that fossil fuels are also subsidized, without references. This “conversation” goes on endlessly with two sides basically talking at each other. Most people understand that coal is dirty, but with oil and natural gas it’s more difficult, for example, to convince people that moving to electric vehicles is a win.
- ZeroGravitas 9y ago
  Here's a grumpy economist disagreeing with a famous IMF report on subsidies. I think he's wrong and the IMF is right. I'm really not sure why he's taking the tone he does, but it gives you both sides of the argument at least: https://www.forbes.com/sites/timworstall/2015/08/04/the-imfs-absurd-calculations-of-fossil-fuel-subsidies-its-really-not-2200-for-every-american/#54861b1222b6 https://www.forbes.com/sites/timworstall/2015/08/04/the-imfs...
- marshray 9y ago
  This looks interesting: United States ‒ Progress Report on Fossil Fuel Subsidies https://www.treasury.gov/open/Documents/USA%20FFSR%20progress%20report%20to%20G20%202014%20Final.pdf https://www.treasury.gov/open/Documents/USA%20FFSR%20progres... There are a number of tax preferences, described below, available in the United States to producers of fossil fuels. The preferences below are all permanent provisions in the tax code.
- diafygi 9y ago
  The largest fossil subsidy is the lack of a tax or regulation on greenhouse gas pollution. I used to work in emissions and most other types of air pollution (NOx, SOx, mercury, etc.) had either a permitting or cap-and-trade process that source emitters had to follow. These regulations were put in place to offset the cost of the externalities of those types of air pollution. For greenhouse gasses, it's only been recently that we even considered greenhouse gasses as pollution, and the EPA was actually starting to implement similar regulations (called Clean Power Plan). However, that is being rolled back by the Trump administration. So it looks like externalities subsidies will continue for the time being, at least on the federal level.

deleted 9y ago

[deleted]

robv 9y ago

That would be the levelized cost of energy (LCOE). One thing to consider which is not reflected in LCOE is baseload power needs or scaling power needs. The thing that really holds back solar is storage cost, not production. If solar could spread out it's power over 24 hours at the same cost. It would be game over in solar rich areas. https://en.m.wikipedia.org/wiki/Cost_of_electricity_by_source https://en.m.wikipedia.org/wiki/Cost_of_electricity_by_sourc...

nimos 9y ago

Oil and solar don't really compete that much. Oil - even at $40 a barrel - is substantively more expensive than pretty much everything else for generating electricity and is rarely used for anything beyond small scale generation. Oil is valuable because of gasoline/diesel which about 3/4 of the barrel goes to. It's all about the ease of transportation that ICE/gasoline/diesel offer that no other fuel can really compete on. The more relevant factor is the price of batteries which might make solar and other electricity sources viable competitors to oil.

peterbecich 9y ago
Very interesting. Incidentally, about 70% of Hawaii's electricity is generated with oil: https://en.wikipedia.org/wiki/Energy_in_Hawaii?wprov=sfla1 https://en.wikipedia.org/wiki/Energy_in_Hawaii?wprov=sfla1
- petre 9y ago
  Doesn't geothermal work for Hawaii? It works just fine for the Azores.
  - peterbecich 9y ago
    You are correct; I didn't know about this for Hawaii: https://www.hawaiianelectric.com/clean-energy-hawaii/clean-energy-facts/renewable-energy-sources/geothermal https://www.hawaiianelectric.com/clean-energy-hawaii/clean-e...

yakitori 9y ago

> Does anyone know how the extraction cost of shale compare to the declining cost of solar? The solar market is so tiny it doesn't matter in the energy discussion. Despite what you read from the cheerleaders ( paid or unpaid ) on social media and the news. The two important changes in energy markets the last decade are fracking/shale oil and natural gas. That's it. > Are we at the point already where some oil fields become non-profitable? Solar doesn't determine profitability of oil field. Oil prices determine profitability of oil fields. And it's all variable depending on location/quality/etc of the oil fields and the oil. Yes, as oil prices drop, there are oil fields that became unprofitable and many oil fields were shuttered. As oil prices rise, they will become profitable and the activity will increase on those fields. Low oil prices and the rise of natural gas along with regulation has absolutely crushed coal markets in the last 10 years. It has also crushed the solar markets as well ( see all the solar companies going bankrupt ). Whether oil and gas can keep this trend going, your guess is good as mine. I think Trump is very pro-energy and he will support low oil prices, low LNG prices and even push for more coal investments. That won't bode well for solar. But what do I know.

woodandsteel 9y ago
>I think Trump is very pro-energy Trump is very pro-fossil fuel energy. He is doing everything he can to crush solar, wind, and EV's.

dragonwriter 9y ago

While solar is starting to represent a significant share of new generating capacity, it's not really material to the oil market, because they don't much directly compete for the same uses over the short term.