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The question on my mind is what else will this freed up oil will be used for? One area could be cheaper fuel for aviation? More plastics? This of course ignore

by psadri 7y ago

The question on my mind is what else will this freed up oil will be used for? One area could be cheaper fuel for aviation? More plastics? This of course ignores the environmental cost of continuing to use oil.

remarkEon 7y ago
[Deleted] Edit: well crap thanks mobile. Wrong thread.
- sigzero 7y ago
  I think you are posting on the wrong thread.
api 7y ago
If oil demand falls a lot of tar sands and offshore and fracking and other hard to get oil will become uneconomical to extract, causing (paradoxically) supply to appear to contract too. The oil age could ratchet down via a series of price spikes and contractions just as it ratcheted up via price spikes and expansions.
- Gibbon1 7y ago
  Thing I read about the history of oil is energy return on investment went from about 125:1 in 1920 to about 10:1 now and tar sands are worse than that. If countries start slapping carbon taxes on oil, you can quickly see where that goes.
  - api 7y ago
    It costs so much less to drive an EV per mile largely because we get electricity from sources with a much higher EROEI than present day oil. Gas, coal, solar, wind, nuclear, and hydro are all much better. The low energy return of current oil is priced in. BTW it's not just obtaining the oil but refining it. Oil refineries use a ton of power usually from electricity, gas, or by burning some of the oil itself. Heavier oil like tar sands and shale takes more energy to refine, as does high sulfur oil. Tar sands is so bad I've heard it described as being almost more a way of very indirectly converting other sources of energy into oil than a source of energy.
    - Gibbon1 7y ago
      Yes. From an energy efficiency point of view we'd be better off burning the oil used to make gasoline in a thermal power plant. Your comment about Tar Sands reminds me of a quote I read a long time ago about the price of coal being linked strongly to the price of diesel. Not to mention fracking boom is just a way to turn free central bank loans into Nat Gas.
- quaquaqua1 7y ago
  I think new uses and new users will continue to abound, so I don't think humans will radically reduce their consumption. One evidence of this is just the sheer number of cars on the road these days. Human population is increasing, and an abundance of cheap ICE cars means everyone is driving to work at least in suburban areas. In the past, busses and bikes were selected because cars weren't economical for certain individuals. Now nearly everyone at our office drives a car by themselves to work. No more car pooling, biking, ubering, bus, train, walking, etc.
  - circlefavshape 7y ago
    Where do you work? That is not the case at anyplace I've ever worked
    - quaquaqua1 7y ago
      In Nassau County NY where the majority of buildings here are either single family homes or corporate office buildings with giant parking lots. Of course just 30 miles east you have NYC where probably less than 5% of people drive to work or own a car, period. But on a geographical basis, most of this population center is designed for cars and it is very common for a 1 hour trip (60 miles) to take 2.5 hours during rush hour(s).
Gibbon1 7y ago
It's a good question. Along with oil came a tremendous amount of dependence. See railroads 50 years before that. Everyone who remembers those battles is dead. But that bargan with the devil is still with us and is likely heat back up as governments try get out from under it.
sremani 7y ago
Petrochemicals are still an important component of industrial agriculture needed for feeding 7 billion people around the world. If oil prices fall too low, Persian Gulf and Russian borders become unstable and from there its any ones guess, how things would take shape. Energy is heavily interlinked with geo-politics and if Persian Gulf is out of the game even for few months - millions of people will starve to death. The only silver lining is that North America is self-sufficient in ONG for the coming years, and that is not the case for much or Europe, Asia and Africa.
- vvanders 7y ago
  Honestly the electrification of farm equipment is coming too. For a tractor you want two things: weight and torque. Electric drivetrains provide both. Tractors have way more complex transmissions(HST, Power Shuttle, etc) that all goes away with a VFD electric drivetrain. Large traction motors already exist(all cargo trains these days are diesel-electric). The lower operating costs and lower maintenance help as well. If I could have bought our Kubota in an electric drivetrain I would have done it in a second
  - cortesoft 7y ago
    I think they are talking about fertilizers, not fuel.
neltnerb 7y ago
If the cost of extracting it is too high, it stays in the ground. Otherwise, it gets used as a precursor for higher value products like plastics. The caloric value of a hydrocarbon is approximately the minimum price it can be sold for. Almost any other use will give higher returns to justify paying a higher price. Though hopefully it doesn't just mean more plastic everything, that would be disappointing.
- seventhtiger 7y ago
  Saudi Arabia extracts oil at $7-$15/barrel. The price should go up over time, but constant innovation in exploration and extraction drives it down also. Their reserves haven't gone down for 20 years because they are constantly exploring more fields. Currently their economy can probably remain stable until as low as $70/barrel for long periods of time although growth would be difficult. If their diversification efforts succeed in the next decade they will be less reliant and will be able to sustain much lower prices. Every last drop in the Persian Gulf is economical for the foreseeable future. Fuel is the least profitable and they are already switching to petrochemicals. Oil is not going away this century.
  - woodandsteel 7y ago
    >Oil is not going away this century. No, it is going to go away. That is because most governments are scared to death of global climate change and are passing laws to do away with fossil fuel consumption. It's not happening all at once, but basically as fast as the technology comes into place to replace fossil fuels.
    - seventhtiger 7y ago
      Even if we stop fossil fuels tomorrow oil is here to stay. How long would it take to develop new aircraft? How long would it take to stop all industries from using plastic, and all agriculture from using petrochemical fertilizer? Not all governments are in on some grand conspiracy. Many governments would greatly benefit. But to make the switch now would mean severe damage to their economy and wellbeing. Even medicine relies heavily on petrochemicals inside and outside of the hospital. Even if a country chooses to sacrifice itself to benefit the common good, it might not be enough to affect actual environmental change.
flukus 7y ago
~70% of oil is used for transportation. Take away the ability to amortize the enormous infrastructure costs at the gas pump and it's not clear that oil will get cheaper, the exact opposite may happen.

by psadri 7y ago

remarkEon 7y ago

[Deleted] Edit: well crap thanks mobile. Wrong thread.

sigzero 7y ago
I think you are posting on the wrong thread.

api 7y ago

If oil demand falls a lot of tar sands and offshore and fracking and other hard to get oil will become uneconomical to extract, causing (paradoxically) supply to appear to contract too. The oil age could ratchet down via a series of price spikes and contractions just as it ratcheted up via price spikes and expansions.

Gibbon1 7y ago
Thing I read about the history of oil is energy return on investment went from about 125:1 in 1920 to about 10:1 now and tar sands are worse than that. If countries start slapping carbon taxes on oil, you can quickly see where that goes.
- api 7y ago
  It costs so much less to drive an EV per mile largely because we get electricity from sources with a much higher EROEI than present day oil. Gas, coal, solar, wind, nuclear, and hydro are all much better. The low energy return of current oil is priced in. BTW it's not just obtaining the oil but refining it. Oil refineries use a ton of power usually from electricity, gas, or by burning some of the oil itself. Heavier oil like tar sands and shale takes more energy to refine, as does high sulfur oil. Tar sands is so bad I've heard it described as being almost more a way of very indirectly converting other sources of energy into oil than a source of energy.
  - Gibbon1 7y ago
    Yes. From an energy efficiency point of view we'd be better off burning the oil used to make gasoline in a thermal power plant. Your comment about Tar Sands reminds me of a quote I read a long time ago about the price of coal being linked strongly to the price of diesel. Not to mention fracking boom is just a way to turn free central bank loans into Nat Gas.
quaquaqua1 7y ago
I think new uses and new users will continue to abound, so I don't think humans will radically reduce their consumption. One evidence of this is just the sheer number of cars on the road these days. Human population is increasing, and an abundance of cheap ICE cars means everyone is driving to work at least in suburban areas. In the past, busses and bikes were selected because cars weren't economical for certain individuals. Now nearly everyone at our office drives a car by themselves to work. No more car pooling, biking, ubering, bus, train, walking, etc.
- circlefavshape 7y ago
  Where do you work? That is not the case at anyplace I've ever worked
  - quaquaqua1 7y ago
    In Nassau County NY where the majority of buildings here are either single family homes or corporate office buildings with giant parking lots. Of course just 30 miles east you have NYC where probably less than 5% of people drive to work or own a car, period. But on a geographical basis, most of this population center is designed for cars and it is very common for a 1 hour trip (60 miles) to take 2.5 hours during rush hour(s).

Gibbon1 7y ago

It's a good question. Along with oil came a tremendous amount of dependence. See railroads 50 years before that. Everyone who remembers those battles is dead. But that bargan with the devil is still with us and is likely heat back up as governments try get out from under it.

sremani 7y ago

Petrochemicals are still an important component of industrial agriculture needed for feeding 7 billion people around the world. If oil prices fall too low, Persian Gulf and Russian borders become unstable and from there its any ones guess, how things would take shape. Energy is heavily interlinked with geo-politics and if Persian Gulf is out of the game even for few months - millions of people will starve to death. The only silver lining is that North America is self-sufficient in ONG for the coming years, and that is not the case for much or Europe, Asia and Africa.

vvanders 7y ago
Honestly the electrification of farm equipment is coming too. For a tractor you want two things: weight and torque. Electric drivetrains provide both. Tractors have way more complex transmissions(HST, Power Shuttle, etc) that all goes away with a VFD electric drivetrain. Large traction motors already exist(all cargo trains these days are diesel-electric). The lower operating costs and lower maintenance help as well. If I could have bought our Kubota in an electric drivetrain I would have done it in a second
- cortesoft 7y ago
  I think they are talking about fertilizers, not fuel.

neltnerb 7y ago

If the cost of extracting it is too high, it stays in the ground. Otherwise, it gets used as a precursor for higher value products like plastics. The caloric value of a hydrocarbon is approximately the minimum price it can be sold for. Almost any other use will give higher returns to justify paying a higher price. Though hopefully it doesn't just mean more plastic everything, that would be disappointing.

seventhtiger 7y ago
Saudi Arabia extracts oil at $7-$15/barrel. The price should go up over time, but constant innovation in exploration and extraction drives it down also. Their reserves haven't gone down for 20 years because they are constantly exploring more fields. Currently their economy can probably remain stable until as low as $70/barrel for long periods of time although growth would be difficult. If their diversification efforts succeed in the next decade they will be less reliant and will be able to sustain much lower prices. Every last drop in the Persian Gulf is economical for the foreseeable future. Fuel is the least profitable and they are already switching to petrochemicals. Oil is not going away this century.
- woodandsteel 7y ago
  >Oil is not going away this century. No, it is going to go away. That is because most governments are scared to death of global climate change and are passing laws to do away with fossil fuel consumption. It's not happening all at once, but basically as fast as the technology comes into place to replace fossil fuels.
  - seventhtiger 7y ago
    Even if we stop fossil fuels tomorrow oil is here to stay. How long would it take to develop new aircraft? How long would it take to stop all industries from using plastic, and all agriculture from using petrochemical fertilizer? Not all governments are in on some grand conspiracy. Many governments would greatly benefit. But to make the switch now would mean severe damage to their economy and wellbeing. Even medicine relies heavily on petrochemicals inside and outside of the hospital. Even if a country chooses to sacrifice itself to benefit the common good, it might not be enough to affect actual environmental change.

flukus 7y ago

~70% of oil is used for transportation. Take away the ability to amortize the enormous infrastructure costs at the gas pump and it's not clear that oil will get cheaper, the exact opposite may happen.