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His writing is Heavy on opinion and low on fact. The simple facts are these: It takes 20 years to turn over the auto fleet and dozens of millions of ices are st

His writing is Heavy on opinion and low on fact. The simple facts are these: It takes 20 years to turn over the auto fleet and dozens of millions of ices are still being bought in 2018. That means gas demand well into the 2040s. Much like our emissions overall, our auto sector is transitioning too little and too late.

bryanlarsen 8y ago
Small changes in demand have a huge impact on price though. Remember, the price of a commodity is set on the margin: the price of a commodity is the marginal cost of the marginal producer. And oil production has high capital costs. So let's pretend in 2018 that the highest cost producer of oil is Canadian tar sands. Let's assume that it costs them $50 per barrel to produce a single barrel excluding capital sunk costs, but $80 to cover both marginal and sunk costs. So even if demand is rising, nobody is going to build a new tar sands project until the price is well above $80 and they're relatively sure that it's going to stay there long enough to pay back their one time capital costs. But if demand is falling, nobody is going to shut down one of those tar sands facilities until the price is below $50. Of course the price of oil has a huge effect on demand, but that demand is pretty sticky. As you said, it takes years for the worldwide fleet to turn over with more or less fuel efficient options. This effect is horribly bad news for the greenhouse effect, though. It does not operate on the margin. We cannot depend on steadily rising petroleum prices to reign in our emissions. We desperately need a global carbon tax or something equivalent or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities and on other global warming mitigation measures.
- sandworm101 8y ago
  Small IC engines are not the total cause of greenhouse gas emissions, not even the bulk of them. Other transport (shipping, rail, trucks, air etc) contribute as does cement, steel, power and fertilizer production. Replacing every "car" with a tesla today wont do nearly what is needed. Coversely, a delay to the switch to EV doesnt spell doom. This is a larger problem.
  - deleted 8y ago
    [deleted]
- leeoniya 8y ago
  > or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities a pretty laughable problem to always bring up instead of the irreparably and rapidly collapsing natural ecosystems on which we depend. (due to pollution, global warming and habitat destruction for human use).
mrfusion 8y ago
Although unlikely, don’t rule out a tipping point situation. Say in ten years enough people bought E.V.s that gas stations started closing down. So less people buy ice vechiles so more gas stations close down. At some point if you start getting range anxiety in your ice vechile it might not complete its 20 year turnover. Note I did say this is unlikely in such a short time frame.
- dsfyu404ed 8y ago
  Gas stations probably won't close en masse. They'll have charging stations (where economically possible) because it fits their business model better because. Gas stations make almost no profit on gas (except the ones by the highway or in the rich neighborhood that cost $0.30/gal more than the others). They make their profit on the convenience store they run. Gas is just what gets people to show up. In urban areas where everyone parks on street gas stations will just convert to charging stations. In rural areas gas stations get enough foot traffic from being convenience stores. Suburban areas where everyone owns a house and can put in a charging station and there's plenty of other buying options for what convenience stores sell are where gas stations may close.
  - gumby 8y ago
    Indeed, BP is the world’s largest seller of Coca Cola. As one of their board members said to me, “It’s all selling black sticky stuff”
  - i2amsam 8y ago
    One thing that has been interesting to me owning an EV for about a year now is how charging and refueling create different needs. With an EV I rarely need to charge when out and about, because I leave every morning at 100% charge. Those few times I do need to visit a charger it's generally for a full charge, so it'll take 20 minutes to an hour, so I'll much prefer charging stations at restaurants or grocery stores. I think there will be a big market to reimagine the gas station concept into something more destination oriented, e.g. much more like truck stops, fewer in number but with more services.
lazyjones 8y ago
Turnover will be faster than usual for several reasons: * large fraudulent auto makers are forced to take back their vehicles that cannot conform to required standards * EV have huge advantages for buyers compared to typical next gen ICE (taxation, running costs, repairs...) * regulation on ICE/diesel cars in cities * governments turning to EV for public transport before EOL of their current fleet So it's not 20 years. Give it 10 from now.
tigershark 8y ago
I beg to differ. There are already entire countries that started outright banning ice machines from much earlier than 2040: https://en.m.wikipedia.org/wiki/List_of_countries_banning_fossil_fuel_vehicles https://en.m.wikipedia.org/wiki/List_of_countries_banning_fo... India as an example of a growing market is banning them in 12 years, Germany as an example of the western world “capital of cars” the same. These pledges were made well before Tesla model 3 was distrupting the market, and as noted there, Tesla may still be just a minority player if China picks up steam. If things ramp up as fast as it seems we may still have an almost global ban by the 2030s and from there the oil industry is pretty much done. The only showstopper for this scenario is the lithium availability and the alternative battery technologies viability, obviously.
- marsokod 8y ago
  That is not what he said though. He said there would be demand for gas well into the 2040s, and since most (all?) these bans only concern new sales, it will take ~20 years after the bans to get rid of a majority of the ICEs. The oil industry already knows they will be done in the 40s. Their EUR (well estimated already 50 years ago) shows that growth will be extremely difficult past the 30s. They won't fight a ban on new sales except for the few who cannot diversify in other domains.

bryanlarsen 8y ago

Small changes in demand have a huge impact on price though. Remember, the price of a commodity is set on the margin: the price of a commodity is the marginal cost of the marginal producer. And oil production has high capital costs. So let's pretend in 2018 that the highest cost producer of oil is Canadian tar sands. Let's assume that it costs them $50 per barrel to produce a single barrel excluding capital sunk costs, but $80 to cover both marginal and sunk costs. So even if demand is rising, nobody is going to build a new tar sands project until the price is well above $80 and they're relatively sure that it's going to stay there long enough to pay back their one time capital costs. But if demand is falling, nobody is going to shut down one of those tar sands facilities until the price is below $50. Of course the price of oil has a huge effect on demand, but that demand is pretty sticky. As you said, it takes years for the worldwide fleet to turn over with more or less fuel efficient options. This effect is horribly bad news for the greenhouse effect, though. It does not operate on the margin. We cannot depend on steadily rising petroleum prices to reign in our emissions. We desperately need a global carbon tax or something equivalent or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities and on other global warming mitigation measures.

sandworm101 8y ago
Small IC engines are not the total cause of greenhouse gas emissions, not even the bulk of them. Other transport (shipping, rail, trucks, air etc) contribute as does cement, steel, power and fertilizer production. Replacing every "car" with a tesla today wont do nearly what is needed. Coversely, a delay to the switch to EV doesnt spell doom. This is a larger problem.
- deleted 8y ago
  [deleted]
leeoniya 8y ago
> or pretty soon we're going to be spending hundreds of trillions of dollars evacuating and protecting our coastal cities a pretty laughable problem to always bring up instead of the irreparably and rapidly collapsing natural ecosystems on which we depend. (due to pollution, global warming and habitat destruction for human use).

mrfusion 8y ago

Although unlikely, don’t rule out a tipping point situation. Say in ten years enough people bought E.V.s that gas stations started closing down. So less people buy ice vechiles so more gas stations close down. At some point if you start getting range anxiety in your ice vechile it might not complete its 20 year turnover. Note I did say this is unlikely in such a short time frame.

dsfyu404ed 8y ago
Gas stations probably won't close en masse. They'll have charging stations (where economically possible) because it fits their business model better because. Gas stations make almost no profit on gas (except the ones by the highway or in the rich neighborhood that cost $0.30/gal more than the others). They make their profit on the convenience store they run. Gas is just what gets people to show up. In urban areas where everyone parks on street gas stations will just convert to charging stations. In rural areas gas stations get enough foot traffic from being convenience stores. Suburban areas where everyone owns a house and can put in a charging station and there's plenty of other buying options for what convenience stores sell are where gas stations may close.
- gumby 8y ago
  Indeed, BP is the world’s largest seller of Coca Cola. As one of their board members said to me, “It’s all selling black sticky stuff”
- i2amsam 8y ago
  One thing that has been interesting to me owning an EV for about a year now is how charging and refueling create different needs. With an EV I rarely need to charge when out and about, because I leave every morning at 100% charge. Those few times I do need to visit a charger it's generally for a full charge, so it'll take 20 minutes to an hour, so I'll much prefer charging stations at restaurants or grocery stores. I think there will be a big market to reimagine the gas station concept into something more destination oriented, e.g. much more like truck stops, fewer in number but with more services.

lazyjones 8y ago

Turnover will be faster than usual for several reasons: * large fraudulent auto makers are forced to take back their vehicles that cannot conform to required standards * EV have huge advantages for buyers compared to typical next gen ICE (taxation, running costs, repairs...) * regulation on ICE/diesel cars in cities * governments turning to EV for public transport before EOL of their current fleet So it's not 20 years. Give it 10 from now.

tigershark 8y ago

I beg to differ. There are already entire countries that started outright banning ice machines from much earlier than 2040: https://en.m.wikipedia.org/wiki/List_of_countries_banning_fossil_fuel_vehicles https://en.m.wikipedia.org/wiki/List_of_countries_banning_fo... India as an example of a growing market is banning them in 12 years, Germany as an example of the western world “capital of cars” the same. These pledges were made well before Tesla model 3 was distrupting the market, and as noted there, Tesla may still be just a minority player if China picks up steam. If things ramp up as fast as it seems we may still have an almost global ban by the 2030s and from there the oil industry is pretty much done. The only showstopper for this scenario is the lithium availability and the alternative battery technologies viability, obviously.

marsokod 8y ago
That is not what he said though. He said there would be demand for gas well into the 2040s, and since most (all?) these bans only concern new sales, it will take ~20 years after the bans to get rid of a majority of the ICEs. The oil industry already knows they will be done in the 40s. Their EUR (well estimated already 50 years ago) shows that growth will be extremely difficult past the 30s. They won't fight a ban on new sales except for the few who cannot diversify in other domains.