15 ms·

Global oil use heads for steepest annual contraction

175 points by JSeymourATL 7y ago

brenden2 7y ago
The planet is getting a break right now. Unfortunately it probably won't last.
- makomk 7y ago
  The construction of green infrastructure is also going to have to be put on hold too, and in the meantime CO2 levels are just going to keep on rising...
  - toomuchtodo 7y ago
    I’d assume you could keep installing utility scale solar and wind while practicing social distancing, at least in my experience of installing ground racking, panels, wiring, inverters, etc.
    - ezzaf 7y ago
      It's currently very difficult to move equipment and expertise from where it is to where you need it for the project. So far the biggest problem for us has been getting panels and inverters from China to site, but it's now shifting to being more of an issue around continuing operations here as the virus escalates. It's highly likely this will delay solar and wind projects in the construction and planning phases. The other interesting angle is what will happen to electricity emissions as demand drops, it should increase the market share of renewables as the highest cost generators drop out first.
      - toomuchtodo 7y ago
        I don't disagree logistical challenges will present themselves, although if China can't move those products out of country, they will likely deploy locally to keep their economy running. I think we'll all agree, a metric ton of CO2 emissions avoided is a metric ton avoided. Also, my hope is that low oil prices drive US frackers out of business (US shale needs ~$40-90/barrel to break even, current WTI price as of this comment is a bit below $30/barrel); this will cause the price of natural gas to spike, causing utility scale battery storage combined with renewables to become immediately cost effective against quite a bit of current natural gas fired generation. Battery storage is already replacing the most expensive "once through" peaking plants (these are essentially jet engines bolted to the ground), and as the economics become more marginal for more efficient combined cycle gas turbine (CCGT), battery uptake will increase. That firm capacity is permanently clean moving forward. These are "one way ratchets" we need to find every opportunity to pull. I will concede that low oil prices do not help with efforts to electrify transportation; the fight continues for a carbon tax and outlawing combustion whenever possible. https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles#Jurisdictions_with_planned_fossil-fuel_vehicle_bans https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehic... (Jurisdictions with planned fossil-fuel vehicle bans) https://www.lazard.com/perspective/lcoe2019 https://www.lazard.com/perspective/lcoe2019 (Levelized Cost of Energy and Levelized Cost of Storage 2019) https://spectrum.ieee.org/energywise/energy/renewables/what-energy-storage-would-have-to-cost-for-a-renewable-grid https://spectrum.ieee.org/energywise/energy/renewables/what-... (How Inexpensive Must Energy Storage Be for Utilities to Switch to 100 Percent Renewables?) https://www.theguardian.com/environment/2020/mar/12/wind-and-solar-plants-will-soon-be-cheaper-than-coal-in-all-big-markets-around-world-analysis-finds https://www.theguardian.com/environment/2020/mar/12/wind-and... (Wind and solar plants will soon be cheaper than coal in all big markets around world, analysis finds) https://pvbuzz.com/renewables-capacity-overwhelms-coal-gas-oil/ https://pvbuzz.com/renewables-capacity-overwhelms-coal-gas-o... (United States: Over the next three years, renewables will add nearly 50,000-MW of new capacity and be more than a quarter of total, while gas, coal, oil, and nuclear will drop by 4,200-MW)
        jdhn 7y ago
        >this will cause the price of natural gas to spike If you drive US frackers out of business, you'll also spike oil prices. Fracking has added so much supply to the world that it's turned the US into an oil exporter on occasion[0]. Removing that much supply from the markets would cause it to tighten, and by doing so would make fracking viable again. [0] https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi-arabia/index.html https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi...
        toomuchtodo 7y ago
        The lag time is all that's needed (spike, price plateau, drop in price). Utilities need stable prices due to rate setting policy between them and the PUC (although some jurisdictions are more friendly to floating fuel prices passed through to consumers than others), so you take advantage of the price volatility while the domestic O&G market is in turmoil, and producers and well developers are going bankrupt or otherwise having their operations disrupted by the macro environment. Doesn't matter if the price of nat gas declines again if you've already built the batteries and renewables.
        donavanm 7y ago
        > my hope is that low oil prices drive US frackers out of business I dont understand this if the $30 price is driven by the saudis and russians. There was immediate talk of furloughs/layoffs and striking rigs. The rigs (and crews) can go up and down in a matter of weeks. The wells and equipment will persist and be mothballed, or acquired in a fire sale. Why wouldnt production start up as soon as the price goes back to $60?
        toomuchtodo 7y ago
        I think all we're arguing is the latency between teardown and starting back up. Variables are going to be how long the Sauds and Russian can engage in a price war, how long until insolvency for producers and developers, and what it looks like when they arrive at insolvency, go through bankruptcy, what happens to the equipment, etc. I argue this is going to go on for more than a few weeks. Saudi Arabia and Russia can hold out longer than most over leveraged US fracking orgs, especially with the US credit markets in turmoil. No one is going to be racing to extend further credit to frackers already in financial distress. Production won't start back up immediately because it'll take time to start back up.
  - alkonaut 7y ago
    Massive public investment is going to be needed after this and money will be cheap. That high speed rail can hopefully be built. Airplanes and pilots will also be a dime a dozen I suppose, but perhaps it will even put.
    - AncientTree 7y ago
      High-speed rail is often slower and definitely more expensive than regular rail, if Europe is any guide. Rail is best used for freight. Autonomous busses and cars (electric) are the best long-term solution for travel. The best approach is simply to enact a Carbon Tax and let the market figure it out. We would be better off promoting mass-contraception to the developing world and halting land clearance in terms of massive targeted CO2 reductions.
      - azmodeus 7y ago
        Even slow trains are a good means of transport. I much prefer a train to buses and cars. I think high speed rail could be potentially a game changer for the job market. In the UK if you could easily commute in from Birmingham or Newcastle then London salaries would be more accessible outside London.
      - tonyedgecombe 7y ago
        How can high-speed rail be slower than regular rail?
      - Zigurd 7y ago
        China relies on rail, and a lot of high speed rail, to move their massive and increasingly mobile population. We no longer need to speculate on whether high speed passenger rail can substitute for a lot of air travel. "...let the market figure it out" would work in a market that isn't already so strongly shaped by subsidies, regulations, and nationalist protectionism. Autonomous vehicles will have a very large and currently underestimated impact on all kinds of other modes of transportation, but there is a wide range of expert views on when that will happen.
      - alkonaut 7y ago
- dntbnmpls 7y ago
  Yep. Every "steepest annual contraction" has been followed by eventual greater oil use because consumption/production is just shifted to the future. The buildings not being built today, the movies not seen this week, the vacation not taken this month, etc are just moved to sometime in the future. In other words, consumption/production isn't being ended, it's simply being delayed.
  - Arbalest 7y ago
    The main counter to that is, that's people who have earnt less money, not able to defer to the future, and instead have to perform a fiscal recovery.
- azepoi 7y ago
  Korea has tested extensively and didn't resort to general lockdown. There was plenty of forewarning but the time was squandered. The inability to act on a foreseeable menace with a two months time horizon doesn't bode well for the response to climate change. Unless we use this moment for a wakeup call.
ISL 7y ago
This event is going to be extremely valuable for evaluating myriad environmental models, including climate.
- davidw 7y ago
  And not just that. They're going to be tracking all these kids who are going to miss months of school as a big "natural experiment". Who knows how many other things they'll be able to get data on... Very sad times, but hopefully people can learn a few things while we're at it.
  - evv 7y ago
    Most schools will offer online courses, and that is an experiment itself.. of course many students will suffer because they don't have access to computer/internet/food/working environment at home.
    - bawolff 7y ago
      Not to mention, conducting a good online course takes preparation and practise (on the part of the teacher). All these online courses are probably going to be setup over the course of like a week. I don't imagine they will be well run online courses.
      - adt2bt 7y ago
        Absolutely. My mom is a teacher for virtual Virginia full time and it took her at least a couple years to get in the swing of things after 25 in the classroom.
  - HenryKissinger 7y ago
    "Students who missed one month of schooling not lagging behind previous cohorts, study finds. Should the school year be shortened?"
    - lallysingh 7y ago
hamburga 7y ago
The general Western game plan right now seems to be: (1) shut down the whole nonessential part of the economy, (2) buy time to not overwhelm medical systems, (3) gradually turn the economy back on where safe. For part (3) the general idea of "safe" has meant, allow people who are medically low-risk to return to the workplace and retail establishments. But we could see that could be expanded to also factor in carbon impact. In other words, we prioritize turning back on the low-carbon parts of the economy first, and maybe leave some high-carbon parts (international vacations) turned off or reduced for good.
- baggy_trough 7y ago
  I assure you that people will be so desperate for jobs that carbon management will not enter their thoughts even one iota.
  - jay_kyburz 7y ago
    It would be nice to think that a lot of the new jobs would be in carbon and environment management. I'd like to see the government pay anybody who wants a job to plant trees.
    - kortilla 7y ago
      With what new revenue? Are you also proposing a new tax burden for a recently slammed economy? That’s gonna be a hard sell.
      - tonyedgecombe 7y ago
        There have been long periods of higher taxes and economic growth. If the private sector can't keep people economically active then the state will step in.
        jay_kyburz 7y ago
        It's called a stimulus package!
baggy_trough 7y ago
We've essentially implemented the Green New Deal.
- advisedwang 7y ago
  Fundamental to the Green New Deal is a program to create new jobs in the green sector, so we can get off fossil fuels without creating massive unemployment and hardship. This is what makes it reminiscent of the new deal. This is essential to making a politically and economically viable proposal and makes it a climate justice proposal rather than just a climate proposal. What we have so far, is cutting fossil fuels without any of the support to prevent this from hurting those who are already struggling. It does give the earth a break, at least, but we need the other stuff to help people and make the change stick.
- gleglegle 7y ago
  Not at all.
- pbourke 7y ago
  Actually, we've implemented the New Great Depression. Remains to be seen how governments process and respond to it.
  - war1025 7y ago
    Something very interesting about this current situation is that I think we're on the verge of a bunch of Democratic talking points getting put in place by a Republican administration.
    - wideasleep1 7y ago
      Such as...UBI? The Clintons were famous for 'borrowing' the ideas of their opponents during elections, stealing that thunder. What's good for the goose....
- adrianN 7y ago
  You might want to look up what the Green New Deal is supposed to be.
badrabbit 7y ago
Another consideration is that when things get back to normal there will be a lot of people that won't go back to commuting as much, less long term energy usage. If the SA vs RU fight doesn't end soon, this will not benefit renewables, but if it does it will be a golden opportunity since oil will cost more and be used less.
- kijin 7y ago
  If oil is used less, it will cost less. Supply and demand. But at least low oil prices will help stall the development of shale gas and oil sands in North America.
  - objektif 7y ago
    Oil is a totally different beast. Simple supply demand economics doesnt work due to geopolitical games that OPEC+ plays.
    - tonyedgecombe 7y ago
      OPEC hasn't been effective at controlling prices for some time now.
      - objektif 7y ago
        Oh yeah? Have you been watching any news in the last two weeks?
        deleted 7y ago
        [deleted]
        mercutio2 7y ago
        Every supplier in a marketplace has the ability to lower marginal prices in a price war. Only effective cartels can raise prices at will. And OPEC’s power to do this is pretty clearly diminished, if not destroyed, by expanded US and Russian capacity.
m0zg 7y ago
Putin's butthole is clenched to the max. Last time oil dropped too steeply the Soviet Union disintegrated. Take one look at this graph https://www.macrotrends.net/1369/crude-oil-price-history-chart https://www.macrotrends.net/1369/crude-oil-price-history-cha... and you can tell immediately where Perestroika began, as well as Russia's 1998 default. You don't even need to superimpose anything.
- patrickaljord 7y ago
  Not comparable, at the time the USSR had an unsustainable economic policy of price control and other socialist goodies. Today's Russia has a market economy similar to the rest of the Western world and these economies are way more resilient to crisis like this.
  - opportune 7y ago
    Except oil and gas makes up over 70% of their exports meaning they are highly susceptible to getting their exchange rates (and thus international trade) wiped out by a drop in value of their primary export. They basically suffer Dutch disease like most other oil exporters
    - enraged_camel 7y ago
      Russia was the one that declined to cut oil production at the last OPEC+ meeting, which means they are capable of enduring this type of downturn. edit: why the downvotes? if you disagree, show some courage by posting a reply.
      - patrickaljord 7y ago
        Saying anything remotely positive about Russia is a no-no on HN. Even if you're not even technically praising them (I wasn't and neither are you). Just saying they may not be going down soon is enough to be downvoted apparently.
  - justin66 7y ago
perl4ever 7y ago
The tone of the article is a little contradictory. It quotes someone as saying we haven't seen a situation like this in history. It also says prices could be in the single digits for the first time since the '97-'99 price war. Which doesn't seem that long ago to me. I remember filling up for less than a dollar a gallon around then, for the first and only time in my life. It's not that cheap yet, is it?
- dade_ 7y ago
  Yeah, it was great - but remember inflation: In 1997 a $20 dollar barrel of oil is $32 in today's money. Calculator: https://www.usinflationcalculator.com/ https://www.usinflationcalculator.com/
  - perl4ever 7y ago
    I wouldn't get inflation numbers from a third party source. However, this site seems to have been broken for quite a while: https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm In any case, I still don't think gas is down to those prices, even with your inflation factor.
- RileyJames 7y ago
  Are you based in California? I recall filling up in Arizona in 2019 for $1.17 per gallon, while California was more like $3.50~ at the time.
  - perl4ever 7y ago
    I've never been to California. The fill-up around '99 was in fact in Arizona, although I haven't been there in a long time. Also the only time I filled a nearly empty tank for under $10, as my car got almost 40 mpg and the usable capacity was probably under 10 gallons.
- war1025 7y ago
  I remember in that time frame visiting family in Montana and wondering how they could afford to drive since gas was like $1.30 / gallon there. (I was also like ten at the time and didn't really understand grown up amounts of money)
dv_dt 7y ago
I can’t help but think that if we had transitioned to an no carbon power grid a market recession wouldn’t have a secondary dip due to shift in demand.
- generatorguy 7y ago
  Presumably companies that supply carbon free energy still get paid only when they actually supply energy. Even though they may not have to purchase fuel they would still make no money and have all of their operating costs. I don’t see why the effect of reduced demand on those generation companies wouldn’t be the same as the price or electrical energy went to zero - unless rate payers have taken on all the risk and pay whether or not any energy is generated.
  - dv_dt 7y ago
    the unit price per mile of use is much lower and will have a lower magnitude of impact on the economy, similarly the impacts on the producers will be smaller and buffered by home electric use (which probably goes up in a case like this)
    - generatorguy 7y ago
      Ah I didn't understand that a "no carbon grid" meant using electricity for transportation and was just thinking in terms of reduced demand for electricity regardless of whether the source was renewable or not.
fatfox 7y ago
Is there a chance that this will push e-mobility since low oil prices for a sustained period of time will make extraction unprofitable for oil companies? Or could it have the opposite effect and make us use more cheaper fuel for individual transport? It seems to me that public transport / ride sharing could take quite a hit (at least in the next few months).
- nordsieck 7y ago
  > Is there a chance that this will push e-mobility since low oil prices for a sustained period of time will make extraction unprofitable for oil companies? Probably not. Different areas have different costs of extraction. Shale oil/tar sands = expensive Saudi Arabia proven reserves = low cost This might put some of the North American oil companies out of business, but those assets will be bought in bankruptcy, so they'll eventually come back online when the price of oil gets high enough again. > Or could it have the opposite effect and make us use more cheaper fuel for individual transport? This seems more likely. Oil is primarily used for transportation. Cheap oil means less reason to go electric. How much of an effect is the questions. I, personally, have no idea. Electric cars are improving at a very rapid rate. However, there doesn't seem to be a good solution for people who don't own a garage. There is some condo/apartment charging sprinkled here and there, but it's not very common. > It seems to me that public transport / ride sharing could take quite a hit (at least in the next few months). Typically, public transport is mostly funded through taxes, so it's not really in much danger. Ride sharing will probably take a beating - especially since flying and night life are getting hammered.

175 points by JSeymourATL 7y ago

brenden2 7y ago

The planet is getting a break right now. Unfortunately it probably won't last.

makomk 7y ago
The construction of green infrastructure is also going to have to be put on hold too, and in the meantime CO2 levels are just going to keep on rising...
- toomuchtodo 7y ago
  I’d assume you could keep installing utility scale solar and wind while practicing social distancing, at least in my experience of installing ground racking, panels, wiring, inverters, etc.
  - ezzaf 7y ago
    It's currently very difficult to move equipment and expertise from where it is to where you need it for the project. So far the biggest problem for us has been getting panels and inverters from China to site, but it's now shifting to being more of an issue around continuing operations here as the virus escalates. It's highly likely this will delay solar and wind projects in the construction and planning phases. The other interesting angle is what will happen to electricity emissions as demand drops, it should increase the market share of renewables as the highest cost generators drop out first.
    - toomuchtodo 7y ago
      I don't disagree logistical challenges will present themselves, although if China can't move those products out of country, they will likely deploy locally to keep their economy running. I think we'll all agree, a metric ton of CO2 emissions avoided is a metric ton avoided. Also, my hope is that low oil prices drive US frackers out of business (US shale needs ~$40-90/barrel to break even, current WTI price as of this comment is a bit below $30/barrel); this will cause the price of natural gas to spike, causing utility scale battery storage combined with renewables to become immediately cost effective against quite a bit of current natural gas fired generation. Battery storage is already replacing the most expensive "once through" peaking plants (these are essentially jet engines bolted to the ground), and as the economics become more marginal for more efficient combined cycle gas turbine (CCGT), battery uptake will increase. That firm capacity is permanently clean moving forward. These are "one way ratchets" we need to find every opportunity to pull. I will concede that low oil prices do not help with efforts to electrify transportation; the fight continues for a carbon tax and outlawing combustion whenever possible. https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehicles#Jurisdictions_with_planned_fossil-fuel_vehicle_bans https://en.wikipedia.org/wiki/Phase-out_of_fossil_fuel_vehic... (Jurisdictions with planned fossil-fuel vehicle bans) https://www.lazard.com/perspective/lcoe2019 https://www.lazard.com/perspective/lcoe2019 (Levelized Cost of Energy and Levelized Cost of Storage 2019) https://spectrum.ieee.org/energywise/energy/renewables/what-energy-storage-would-have-to-cost-for-a-renewable-grid https://spectrum.ieee.org/energywise/energy/renewables/what-... (How Inexpensive Must Energy Storage Be for Utilities to Switch to 100 Percent Renewables?) https://www.theguardian.com/environment/2020/mar/12/wind-and-solar-plants-will-soon-be-cheaper-than-coal-in-all-big-markets-around-world-analysis-finds https://www.theguardian.com/environment/2020/mar/12/wind-and... (Wind and solar plants will soon be cheaper than coal in all big markets around world, analysis finds) https://pvbuzz.com/renewables-capacity-overwhelms-coal-gas-oil/ https://pvbuzz.com/renewables-capacity-overwhelms-coal-gas-o... (United States: Over the next three years, renewables will add nearly 50,000-MW of new capacity and be more than a quarter of total, while gas, coal, oil, and nuclear will drop by 4,200-MW)
      - jdhn 7y ago
        >this will cause the price of natural gas to spike If you drive US frackers out of business, you'll also spike oil prices. Fracking has added so much supply to the world that it's turned the US into an oil exporter on occasion[0]. Removing that much supply from the markets would cause it to tighten, and by doing so would make fracking viable again. [0] https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi-arabia/index.html https://www.cnn.com/2019/03/08/business/us-oil-exports-saudi...
        toomuchtodo 7y ago
        The lag time is all that's needed (spike, price plateau, drop in price). Utilities need stable prices due to rate setting policy between them and the PUC (although some jurisdictions are more friendly to floating fuel prices passed through to consumers than others), so you take advantage of the price volatility while the domestic O&G market is in turmoil, and producers and well developers are going bankrupt or otherwise having their operations disrupted by the macro environment. Doesn't matter if the price of nat gas declines again if you've already built the batteries and renewables.
      - donavanm 7y ago
        > my hope is that low oil prices drive US frackers out of business I dont understand this if the $30 price is driven by the saudis and russians. There was immediate talk of furloughs/layoffs and striking rigs. The rigs (and crews) can go up and down in a matter of weeks. The wells and equipment will persist and be mothballed, or acquired in a fire sale. Why wouldnt production start up as soon as the price goes back to $60?
        toomuchtodo 7y ago
        I think all we're arguing is the latency between teardown and starting back up. Variables are going to be how long the Sauds and Russian can engage in a price war, how long until insolvency for producers and developers, and what it looks like when they arrive at insolvency, go through bankruptcy, what happens to the equipment, etc. I argue this is going to go on for more than a few weeks. Saudi Arabia and Russia can hold out longer than most over leveraged US fracking orgs, especially with the US credit markets in turmoil. No one is going to be racing to extend further credit to frackers already in financial distress. Production won't start back up immediately because it'll take time to start back up.
- alkonaut 7y ago
  Massive public investment is going to be needed after this and money will be cheap. That high speed rail can hopefully be built. Airplanes and pilots will also be a dime a dozen I suppose, but perhaps it will even put.
  - AncientTree 7y ago
    High-speed rail is often slower and definitely more expensive than regular rail, if Europe is any guide. Rail is best used for freight. Autonomous busses and cars (electric) are the best long-term solution for travel. The best approach is simply to enact a Carbon Tax and let the market figure it out. We would be better off promoting mass-contraception to the developing world and halting land clearance in terms of massive targeted CO2 reductions.
    - azmodeus 7y ago
      Even slow trains are a good means of transport. I much prefer a train to buses and cars. I think high speed rail could be potentially a game changer for the job market. In the UK if you could easily commute in from Birmingham or Newcastle then London salaries would be more accessible outside London.
    - tonyedgecombe 7y ago
      How can high-speed rail be slower than regular rail?
    - Zigurd 7y ago
      China relies on rail, and a lot of high speed rail, to move their massive and increasingly mobile population. We no longer need to speculate on whether high speed passenger rail can substitute for a lot of air travel. "...let the market figure it out" would work in a market that isn't already so strongly shaped by subsidies, regulations, and nationalist protectionism. Autonomous vehicles will have a very large and currently underestimated impact on all kinds of other modes of transportation, but there is a wide range of expert views on when that will happen.
    - alkonaut 7y ago
dntbnmpls 7y ago
Yep. Every "steepest annual contraction" has been followed by eventual greater oil use because consumption/production is just shifted to the future. The buildings not being built today, the movies not seen this week, the vacation not taken this month, etc are just moved to sometime in the future. In other words, consumption/production isn't being ended, it's simply being delayed.
- Arbalest 7y ago
  The main counter to that is, that's people who have earnt less money, not able to defer to the future, and instead have to perform a fiscal recovery.
azepoi 7y ago
Korea has tested extensively and didn't resort to general lockdown. There was plenty of forewarning but the time was squandered. The inability to act on a foreseeable menace with a two months time horizon doesn't bode well for the response to climate change. Unless we use this moment for a wakeup call.

ISL 7y ago

This event is going to be extremely valuable for evaluating myriad environmental models, including climate.

davidw 7y ago
And not just that. They're going to be tracking all these kids who are going to miss months of school as a big "natural experiment". Who knows how many other things they'll be able to get data on... Very sad times, but hopefully people can learn a few things while we're at it.
- evv 7y ago
  Most schools will offer online courses, and that is an experiment itself.. of course many students will suffer because they don't have access to computer/internet/food/working environment at home.
  - bawolff 7y ago
    Not to mention, conducting a good online course takes preparation and practise (on the part of the teacher). All these online courses are probably going to be setup over the course of like a week. I don't imagine they will be well run online courses.
    - adt2bt 7y ago
      Absolutely. My mom is a teacher for virtual Virginia full time and it took her at least a couple years to get in the swing of things after 25 in the classroom.
- HenryKissinger 7y ago
  "Students who missed one month of schooling not lagging behind previous cohorts, study finds. Should the school year be shortened?"
  - lallysingh 7y ago

hamburga 7y ago

The general Western game plan right now seems to be: (1) shut down the whole nonessential part of the economy, (2) buy time to not overwhelm medical systems, (3) gradually turn the economy back on where safe. For part (3) the general idea of "safe" has meant, allow people who are medically low-risk to return to the workplace and retail establishments. But we could see that could be expanded to also factor in carbon impact. In other words, we prioritize turning back on the low-carbon parts of the economy first, and maybe leave some high-carbon parts (international vacations) turned off or reduced for good.

baggy_trough 7y ago
I assure you that people will be so desperate for jobs that carbon management will not enter their thoughts even one iota.
- jay_kyburz 7y ago
  It would be nice to think that a lot of the new jobs would be in carbon and environment management. I'd like to see the government pay anybody who wants a job to plant trees.
  - kortilla 7y ago
    With what new revenue? Are you also proposing a new tax burden for a recently slammed economy? That’s gonna be a hard sell.
    - tonyedgecombe 7y ago
      There have been long periods of higher taxes and economic growth. If the private sector can't keep people economically active then the state will step in.
      - jay_kyburz 7y ago
        It's called a stimulus package!

baggy_trough 7y ago

We've essentially implemented the Green New Deal.

advisedwang 7y ago
Fundamental to the Green New Deal is a program to create new jobs in the green sector, so we can get off fossil fuels without creating massive unemployment and hardship. This is what makes it reminiscent of the new deal. This is essential to making a politically and economically viable proposal and makes it a climate justice proposal rather than just a climate proposal. What we have so far, is cutting fossil fuels without any of the support to prevent this from hurting those who are already struggling. It does give the earth a break, at least, but we need the other stuff to help people and make the change stick.
gleglegle 7y ago
Not at all.
pbourke 7y ago
Actually, we've implemented the New Great Depression. Remains to be seen how governments process and respond to it.
- war1025 7y ago
  Something very interesting about this current situation is that I think we're on the verge of a bunch of Democratic talking points getting put in place by a Republican administration.
  - wideasleep1 7y ago
    Such as...UBI? The Clintons were famous for 'borrowing' the ideas of their opponents during elections, stealing that thunder. What's good for the goose....
adrianN 7y ago
You might want to look up what the Green New Deal is supposed to be.

badrabbit 7y ago

Another consideration is that when things get back to normal there will be a lot of people that won't go back to commuting as much, less long term energy usage. If the SA vs RU fight doesn't end soon, this will not benefit renewables, but if it does it will be a golden opportunity since oil will cost more and be used less.

kijin 7y ago
If oil is used less, it will cost less. Supply and demand. But at least low oil prices will help stall the development of shale gas and oil sands in North America.
- objektif 7y ago
  Oil is a totally different beast. Simple supply demand economics doesnt work due to geopolitical games that OPEC+ plays.
  - tonyedgecombe 7y ago
    OPEC hasn't been effective at controlling prices for some time now.
    - objektif 7y ago
      Oh yeah? Have you been watching any news in the last two weeks?
      - deleted 7y ago
        [deleted]
      - mercutio2 7y ago
        Every supplier in a marketplace has the ability to lower marginal prices in a price war. Only effective cartels can raise prices at will. And OPEC’s power to do this is pretty clearly diminished, if not destroyed, by expanded US and Russian capacity.

m0zg 7y ago

Putin's butthole is clenched to the max. Last time oil dropped too steeply the Soviet Union disintegrated. Take one look at this graph https://www.macrotrends.net/1369/crude-oil-price-history-chart https://www.macrotrends.net/1369/crude-oil-price-history-cha... and you can tell immediately where Perestroika began, as well as Russia's 1998 default. You don't even need to superimpose anything.

patrickaljord 7y ago
Not comparable, at the time the USSR had an unsustainable economic policy of price control and other socialist goodies. Today's Russia has a market economy similar to the rest of the Western world and these economies are way more resilient to crisis like this.
- opportune 7y ago
  Except oil and gas makes up over 70% of their exports meaning they are highly susceptible to getting their exchange rates (and thus international trade) wiped out by a drop in value of their primary export. They basically suffer Dutch disease like most other oil exporters
  - enraged_camel 7y ago
    Russia was the one that declined to cut oil production at the last OPEC+ meeting, which means they are capable of enduring this type of downturn. edit: why the downvotes? if you disagree, show some courage by posting a reply.
    - patrickaljord 7y ago
      Saying anything remotely positive about Russia is a no-no on HN. Even if you're not even technically praising them (I wasn't and neither are you). Just saying they may not be going down soon is enough to be downvoted apparently.
- justin66 7y ago

perl4ever 7y ago

The tone of the article is a little contradictory. It quotes someone as saying we haven't seen a situation like this in history. It also says prices could be in the single digits for the first time since the '97-'99 price war. Which doesn't seem that long ago to me. I remember filling up for less than a dollar a gallon around then, for the first and only time in my life. It's not that cheap yet, is it?

dade_ 7y ago
Yeah, it was great - but remember inflation: In 1997 a $20 dollar barrel of oil is $32 in today's money. Calculator: https://www.usinflationcalculator.com/ https://www.usinflationcalculator.com/
- perl4ever 7y ago
  I wouldn't get inflation numbers from a third party source. However, this site seems to have been broken for quite a while: https://www.bls.gov/data/inflation_calculator.htm https://www.bls.gov/data/inflation_calculator.htm In any case, I still don't think gas is down to those prices, even with your inflation factor.
RileyJames 7y ago
Are you based in California? I recall filling up in Arizona in 2019 for $1.17 per gallon, while California was more like $3.50~ at the time.
- perl4ever 7y ago
  I've never been to California. The fill-up around '99 was in fact in Arizona, although I haven't been there in a long time. Also the only time I filled a nearly empty tank for under $10, as my car got almost 40 mpg and the usable capacity was probably under 10 gallons.
war1025 7y ago
I remember in that time frame visiting family in Montana and wondering how they could afford to drive since gas was like $1.30 / gallon there. (I was also like ten at the time and didn't really understand grown up amounts of money)

dv_dt 7y ago

I can’t help but think that if we had transitioned to an no carbon power grid a market recession wouldn’t have a secondary dip due to shift in demand.

generatorguy 7y ago
Presumably companies that supply carbon free energy still get paid only when they actually supply energy. Even though they may not have to purchase fuel they would still make no money and have all of their operating costs. I don’t see why the effect of reduced demand on those generation companies wouldn’t be the same as the price or electrical energy went to zero - unless rate payers have taken on all the risk and pay whether or not any energy is generated.
- dv_dt 7y ago
  the unit price per mile of use is much lower and will have a lower magnitude of impact on the economy, similarly the impacts on the producers will be smaller and buffered by home electric use (which probably goes up in a case like this)
  - generatorguy 7y ago
    Ah I didn't understand that a "no carbon grid" meant using electricity for transportation and was just thinking in terms of reduced demand for electricity regardless of whether the source was renewable or not.

fatfox 7y ago

Is there a chance that this will push e-mobility since low oil prices for a sustained period of time will make extraction unprofitable for oil companies? Or could it have the opposite effect and make us use more cheaper fuel for individual transport? It seems to me that public transport / ride sharing could take quite a hit (at least in the next few months).

nordsieck 7y ago
> Is there a chance that this will push e-mobility since low oil prices for a sustained period of time will make extraction unprofitable for oil companies? Probably not. Different areas have different costs of extraction. Shale oil/tar sands = expensive Saudi Arabia proven reserves = low cost This might put some of the North American oil companies out of business, but those assets will be bought in bankruptcy, so they'll eventually come back online when the price of oil gets high enough again. > Or could it have the opposite effect and make us use more cheaper fuel for individual transport? This seems more likely. Oil is primarily used for transportation. Cheap oil means less reason to go electric. How much of an effect is the questions. I, personally, have no idea. Electric cars are improving at a very rapid rate. However, there doesn't seem to be a good solution for people who don't own a garage. There is some condo/apartment charging sprinkled here and there, but it's not very common. > It seems to me that public transport / ride sharing could take quite a hit (at least in the next few months). Typically, public transport is mostly funded through taxes, so it's not really in much danger. Ride sharing will probably take a beating - especially since flying and night life are getting hammered.