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I grew up in Alberta and I've been hearing this story as long as I can remember (and I'm old now). While the oil industry is definitely in decline, consumers ar

I grew up in Alberta and I've been hearing this story as long as I can remember (and I'm old now). While the oil industry is definitely in decline, consumers aren't going to give up on all the luxuries that fossil fuels provide anytime soon. There's also the growing emerging world which has a big appetite for energy and goods. The virus is probably a temporary thing and life will go on. Additionally, the low price of energy will result in an increase in consumption once everything goes back to normal.

nopinsight 6y ago
Efficiency of renewables over fossil fuel at utility scale is a new thing that never happened in history: https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Lazard_(2019)_2 https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#... Most oil is currently used for transportation. Demand for transportation of people could be affected long-term. Quoting myself here: "There might be some semi-permanent change in people's behaviors if the epidemic continues for many months. Many people will form a habit of doing more things at home/online: more takeouts, more online shopping, live/recorded video classes, virtual meetings, telehealth, etc. Better online services will also spring up to support the habits/practices. Since online activities often save time, the new habits could become a new equilibrium: people/companies who adopt them will often have an economic advantage, influencing others to do the same. Thus, oil demand could be significantly diminished long-term as well."
martythemaniak 6y ago
While I think the overall rate of production of EVs is frustratingly slow, once that giant industry is spun up the oil industry is going to suffer like nothing before. It can recover from this corona situation, but it won't be able to from a shift to EVs. I wish they would see this as their final warning. It's doubly frustrating for Alberta, which has a high baseline cost of production and bills itself business friendly and talks a lot about "energy". Imagine for a sec that they used a small part of the Heritage Fund (say $1 Billion) and a set of business-friendly regulations to set up an X-Prize type competition for advanced nuclear? How much private investment could they attract? But it's not gonna happen, all their talk of "business" and "energy" just means oil, oil, oil.
- brenden2 6y ago
  Where do you think all the plastic, batteries, and energy required to run the manufacturing process for those EVs comes from? I'll give you a hint: it's not renewables.
  - Retric 6y ago
    69% of oil is directly used for transportation, if that falls by even 10% oil sands are going away, if it falls by 30% fracking is going away. Home heating etc make up the bulk of the remainder, with plastics being a small fraction. They may be picked up again in 40 years to enable plastic manufacturing, but commodity extraction is all about boom and bust cycles. PS: Buying a 10 gallons of gas for a fillip is 63 pounds. How frequently are you buying 63 pounds of plastic?
  - nopinsight 6y ago
    Would the supply of plastic and other products from low-cost producers of petrochemicals be sufficient for global demand? Can low-cost producers shift their product mix toward more chemicals and less oil?
  - dashundchen 6y ago
    According to the EIA, in the US almost 70% of oil is used for transportation. The US consumes a fifth of the worlds oil. Even if you committed to fossil fuel only for industrial processes (which I don't see why you would), if used to electrify transportation you'd eliminate a majority of the demand for oil. Plastics usage is marginal compared to transportation. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc...
  - martythemaniak 6y ago
    That's a very dense question. Plastics are a sort of byproduct of oil production and account for like (IIRC) 5% of them. You can't sustain an industry on that. If their price goes up, there'll be lots of substitutes popping up, but we should also note that. It should also be noted that plastics, by themselves, don't contribute to climate change - the carbon doesn't go in the atmosphere. Batteries? I'm not sure what the question is. There's a lot of stuff that does into them and fossil fuels is present everywhere, for example powering the mining trucks. Except the way to get rid of fossil fuel powered mining trucks is to have EV semis, which need EV pickup trucks, which need EV passenger cars. That is, it's a virtuous cycle where more EVs cause prices to go down and more EVs to exist. You can plainly see this cycle play out over the last decade and it's only going to accelerate. Energy? Well, this is simple - it depends on where you make EVs. Plenty of jurisdictions have very low carbon electricity.
3pt14159 6y ago
Lots of sunlight and empty space in Africa. We're getting pretty close to the point where it's going to be cheaper to run a car on electricity than it is on gasoline or diesel and once this thing tips over it is game over for Alberta. Elon's Semi is coming. The electric cars are coming. Fracking is going to outcompete the oilsands in Alberta. The sooner Alberta can retool to something else the better. I'm not one of those anti-pipeline Canadians, I think they still have a place and they're better for the environment than railcars, but we need to get serious about the timeline here. Both for global warming and for Alberta's economy.
- SketchySeaBeast 6y ago
  As an Albertan, I absolutely 100% agree. Pitter-patter, let's get at er.
chasd00 6y ago
That's a fair point, the question is just when. If energy demand remains low for long enough many people are out of business. Ironically, i wonder if that means when demand returns prices will skyrocket because of supply issues. i've loved watching OPEC twist in the wind over the years because fracking put a price ceiling on a barrel of oil below which the OPEC needed for survival. I never guessed the price would fall completely through the floor and kill everyone though. In my adult life I've seen the terrorist attacks of 9/11/2001, the financial crisis in 2008-2009, and now this. I've also seen the rise of the Internet, wireless communications, and SpaceX (yes i'm a fanboi). The world is a crazy place.
- brenden2 6y ago
  I do think it'll happen eventually, but there are 2 big things that probably need to happen before we can get there: 1) widespread adoption of nuclear power 2) significant battery improvements
diego_moita 6y ago
> once everything goes back to normal. Dream on. In Alberta, sweet dreams are made of oil. The Atlantic provinces are still waiting for the fish to come back. The fish won't come back to the Atlantic, not soon. Big oil won't come back to Alberta, not soon.
Tiktaalik 6y ago
The only thing that will change the status quo is government regulation straight up banning oil and gas products or making them niche and expensive. For example the City of Vancouver the other night quietly banned using natural gas for heating and hot water in new developments under 3 stories. They'd already done so buildings taller than that. This will lower GHG emissions from buildings by 86% by making them 'zero emission' and as well this sort of thing, if adopted widely, will lower demand and prices for natural gas.

nopinsight 6y ago

Efficiency of renewables over fossil fuel at utility scale is a new thing that never happened in history: https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#Lazard_(2019)_2 https://en.wikipedia.org/wiki/Cost_of_electricity_by_source#... Most oil is currently used for transportation. Demand for transportation of people could be affected long-term. Quoting myself here: "There might be some semi-permanent change in people's behaviors if the epidemic continues for many months. Many people will form a habit of doing more things at home/online: more takeouts, more online shopping, live/recorded video classes, virtual meetings, telehealth, etc. Better online services will also spring up to support the habits/practices. Since online activities often save time, the new habits could become a new equilibrium: people/companies who adopt them will often have an economic advantage, influencing others to do the same. Thus, oil demand could be significantly diminished long-term as well."

martythemaniak 6y ago

While I think the overall rate of production of EVs is frustratingly slow, once that giant industry is spun up the oil industry is going to suffer like nothing before. It can recover from this corona situation, but it won't be able to from a shift to EVs. I wish they would see this as their final warning. It's doubly frustrating for Alberta, which has a high baseline cost of production and bills itself business friendly and talks a lot about "energy". Imagine for a sec that they used a small part of the Heritage Fund (say $1 Billion) and a set of business-friendly regulations to set up an X-Prize type competition for advanced nuclear? How much private investment could they attract? But it's not gonna happen, all their talk of "business" and "energy" just means oil, oil, oil.

brenden2 6y ago
Where do you think all the plastic, batteries, and energy required to run the manufacturing process for those EVs comes from? I'll give you a hint: it's not renewables.
- Retric 6y ago
  69% of oil is directly used for transportation, if that falls by even 10% oil sands are going away, if it falls by 30% fracking is going away. Home heating etc make up the bulk of the remainder, with plastics being a small fraction. They may be picked up again in 40 years to enable plastic manufacturing, but commodity extraction is all about boom and bust cycles. PS: Buying a 10 gallons of gas for a fillip is 63 pounds. How frequently are you buying 63 pounds of plastic?
- nopinsight 6y ago
  Would the supply of plastic and other products from low-cost producers of petrochemicals be sufficient for global demand? Can low-cost producers shift their product mix toward more chemicals and less oil?
- dashundchen 6y ago
  According to the EIA, in the US almost 70% of oil is used for transportation. The US consumes a fifth of the worlds oil. Even if you committed to fossil fuel only for industrial processes (which I don't see why you would), if used to electrify transportation you'd eliminate a majority of the demand for oil. Plastics usage is marginal compared to transportation. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc...
- martythemaniak 6y ago
  That's a very dense question. Plastics are a sort of byproduct of oil production and account for like (IIRC) 5% of them. You can't sustain an industry on that. If their price goes up, there'll be lots of substitutes popping up, but we should also note that. It should also be noted that plastics, by themselves, don't contribute to climate change - the carbon doesn't go in the atmosphere. Batteries? I'm not sure what the question is. There's a lot of stuff that does into them and fossil fuels is present everywhere, for example powering the mining trucks. Except the way to get rid of fossil fuel powered mining trucks is to have EV semis, which need EV pickup trucks, which need EV passenger cars. That is, it's a virtuous cycle where more EVs cause prices to go down and more EVs to exist. You can plainly see this cycle play out over the last decade and it's only going to accelerate. Energy? Well, this is simple - it depends on where you make EVs. Plenty of jurisdictions have very low carbon electricity.

3pt14159 6y ago

Lots of sunlight and empty space in Africa. We're getting pretty close to the point where it's going to be cheaper to run a car on electricity than it is on gasoline or diesel and once this thing tips over it is game over for Alberta. Elon's Semi is coming. The electric cars are coming. Fracking is going to outcompete the oilsands in Alberta. The sooner Alberta can retool to something else the better. I'm not one of those anti-pipeline Canadians, I think they still have a place and they're better for the environment than railcars, but we need to get serious about the timeline here. Both for global warming and for Alberta's economy.

SketchySeaBeast 6y ago
As an Albertan, I absolutely 100% agree. Pitter-patter, let's get at er.

chasd00 6y ago

That's a fair point, the question is just when. If energy demand remains low for long enough many people are out of business. Ironically, i wonder if that means when demand returns prices will skyrocket because of supply issues. i've loved watching OPEC twist in the wind over the years because fracking put a price ceiling on a barrel of oil below which the OPEC needed for survival. I never guessed the price would fall completely through the floor and kill everyone though. In my adult life I've seen the terrorist attacks of 9/11/2001, the financial crisis in 2008-2009, and now this. I've also seen the rise of the Internet, wireless communications, and SpaceX (yes i'm a fanboi). The world is a crazy place.

brenden2 6y ago
I do think it'll happen eventually, but there are 2 big things that probably need to happen before we can get there: 1) widespread adoption of nuclear power 2) significant battery improvements

diego_moita 6y ago

> once everything goes back to normal. Dream on. In Alberta, sweet dreams are made of oil. The Atlantic provinces are still waiting for the fish to come back. The fish won't come back to the Atlantic, not soon. Big oil won't come back to Alberta, not soon.

Tiktaalik 6y ago

The only thing that will change the status quo is government regulation straight up banning oil and gas products or making them niche and expensive. For example the City of Vancouver the other night quietly banned using natural gas for heating and hot water in new developments under 3 stories. They'd already done so buildings taller than that. This will lower GHG emissions from buildings by 86% by making them 'zero emission' and as well this sort of thing, if adopted widely, will lower demand and prices for natural gas.