
Analysts See Oil Demand Peaking by 2030 as Electric Vehicles Boom - uptown
https://www.bloomberg.com/news/articles/2018-01-22/bofa-sees-oil-demand-peaking-by-2030-as-electric-vehicles-boom
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CapitalistCartr
The year petroleum usage peaks is unknowable at present, but it obvious its
coming. But the year will only be significant in hindsight. There have been
many plateau years before. In 2007 Worldwide usage was 86.3 MBPD, in '08 it
was 85.8, in '09 it was 84.3, then in 2010 it was back up to 86.4. All due to
the economic slump, of course, but now every pundit will saying with every
tiny slowdown "the end is nigh".

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njarboe
I always find it strange that people in the oil business talk about the "oil
demand" without respect to price. Maybe this idea comes from when the West was
pumping oil at maximum rates, fracking did not exist, and the OPEC cartel
could control the price by fiat (and before OPEC I have heard the oil price
was controlled by the output in Texas). At that time there was a price set by
OPEC and they pumped to meet demand at that price. In that environment the
using the phrase "oil demand" for "oil usage" made sense. But in today's world
OPEC does not seem to be able to set the price very well. Peak "oil demand",
where demand is determined by the peak amount of oil consumed, will depend on
the price and uses of oil in the future.

Some crazy future tech in 2045 which makes heavy oil and tar sands profitable
to extract and turn into carbon fiber at $100 a ton might replace structural
steel. This could push oil usage up to a new peak, even if a previous "oil
demand" peak happened in 2030, when we decided it was really stupid to burn
this great chemical stock for raw energy.

~~~
pm90
When I studied organic chemistry in high school, I vividly recall one of the
authors of the chemistry textbook saying something to the tune of: its
unbelievable how much stuff you can make with petroleum but our civilization
has decided the best use is to burn it.

If the world's population continues to grow at its current pace, and more
people are lifted out of poverty, the demand for petrochemicals and petroleum
derived products will only keep increasing. And in the further future when
humans colonize other planets, petroleum will be a uniquely Earth-based
resource making it even more valuable.

~~~
philipkglass
_And in the further future when humans colonize other planets, petroleum will
be a uniquely Earth-based resource making it even more valuable._

If you have electricity, water, and a carbon source, you can manufacture the
hydrocarbons currently sourced from petroleum. Small scientific colonies would
import terrestrial hydrocarbons just like they would import terrestrial
aluminum and glass, of course, but if you're picturing self-sustaining space
industrialization and colonization, it won't be worth sending hydrocarbons
from Earth to Mars.

Hydrocarbon synthesis also puts an (admittedly high) upper limit on the cost
of making organic chemicals on Earth. Some Peak Oilers were confused about
this, imagining fossil resources as irreplaceable magic. "It's not just fuel
-- pesticides, pharmaceuticals, and dyes are made from oil too!" they'd say,
implying that you can't have modern pharmaceuticals without oil. But that's
like saying that you can't make paper without trees. The reason that paper is
overwhelmingly made from trees is because that's currently the cheapest way,
not because other ways are unknown. If the abundance/cheapness of feedstocks
changes, so will their share of the market. (And costs will go up too, of
course. The cost of refined liquid fuels goes up nearly linearly with the cost
of crude oil. The cost of drugs/dyes/pesticides rises much less, because only
a small share of their total cost of production came from simple hydrocarbon
feedstocks in the first place.)

With the exception of nuclear fuels, which are truly "used up" during fission
or fusion, all atoms are recyclable.

~~~
njarboe
I would love to see a chart of the energy required (both theoretical and
"currently best working system") to produce various hydrocarbons from CO2 and
H2O feedstock. Methane, propane, heptane, etc., and then some mixtures like
gasoline, diesel fuel, asphalt. I quick search did not bring anything up for
me.

~~~
philipkglass
Here's an analysis of methane synthesized with water, CO2, and electricity:

[http://www.sgc.se/ckfinder/userfiles/files/SGC284_eng.pdf](http://www.sgc.se/ckfinder/userfiles/files/SGC284_eng.pdf)

They put it at 52% energetic efficiency from electricity. They're starting
with a concentrated CO2 stream as a byproduct of a biological waste digester.
If they were starting with a more dilute CO2 source like seawater or ordinary
air there would also be an energy cost for concentrating the CO2. In my
estimation, a reasonable rule of thumb is that it would take 2-4 megajoules of
electricity to make one megajoule of common small hydrocarbons (methane,
ethane, ethylene, propylene, benzene...)

For example, a megawatt hour of electricity is 3600 MJ. If it were used to
synthesize the hydrocarbon commodity ethylene at 1/3 efficiency, it would
yield about 24 kilograms of ethylene. Bulk ethylene prices in the US in July
were $645/tonne, or $15.38 for 24 kilograms. Today a megawatt hour of
renewable electricity might cost $30 in a favorable location. So the
electricity cost alone of renewable ethylene would be nearly double the all-in
cost of petro-ethylene. Probably renewable ethylene would be closer to 4x the
cost of petro-ethylene once you add other costs. But, notably, not 100x or
even 10x the cost; disposable polyethylene packaging might become too
expensive for routine use, absent fossils, but durable goods incorporating
polyethylene parts would still be affordable. Higher-value materials
synthesized starting from ethylene, like detergents and coolant fluids, would
also see a relatively modest price increase.

There's a lot of literature on producing liquid fuels and chemicals starting
from natural gas and coal. Most schemas proceed through an intermediate called
synthesis gas, ("syngas") a mixture of CO/H2 that can be converted into many
different products depending on the catalysts used. To get the overall
energetic efficiency you'd combine the extant huge literature on synthesis gas
conversion with the assumption that synthesis gas is made from the reverse
water gas reaction of CO2 with electrolytic hydrogen from water. (Not hard if
you're fluent with chemistry and units conversion, otherwise may be
challenging. I'd do a table of examples myself if I thought this comment would
be more visible.)

Here's a presentation that has a schematic view synthesizing renewable
hydrocarbons without biomass -- see particularly the slide "Combining
Technologies" where it shows that methanol, gasoline, diesel, and methane can
all be produced from the same syngas intermediate:

[http://orbit.dtu.dk/files/51542760/Production_of_Green_Natur...](http://orbit.dtu.dk/files/51542760/Production_of_Green_Natural_Gas_presentation.pdf)

~~~
njarboe
Thanks for the info and the links. Pretty easy to get a pure CO2 stream on
Mars and H2O is all over the place. Just need some nuclear generators to get
cranking.

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olfactory
Shouldn’t this change US Mideast policy immediately? My guess is that planners
don’t believe this to be true.

~~~
splouk
Why would it?

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olfactory
Most of the “investments” in “stability” of the region have payoffs in the
many decades.

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the_duke
By the estimate, peak oil is still a long time off, and just crossing peak oil
does not mean that oil will become unimportant over night.

~~~
olfactory
True, but much of the political importance of oil has to do with the threat of
a sudden oil shortage. The first defense (for the US) is to create massive
reserve tanks, the second is to befriend oil producing regimes, the third is
to invest trillions propping up those regimes.

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tristanj
Another reading of this report:

Oil consumption will remain at today's level or higher through 2040. Present
oil consumption is 99 Mb/d, will peak at 106 Mb/d in 2030, then decrease to
~97 Mb/d by 2045.

Honestly it's a lot less rosy than the title suggests.

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JohnStudio
My question is the demand collapse, and transition to a demand spike. The
current models of increased load, like demand reduction and management
companies that do nothing more than broker kW for incentives for shut-down
during high peak times - et al. [https://energy.gov/eere/wipo/demand-
reduction-0](https://energy.gov/eere/wipo/demand-reduction-0) // \--> so, as
we shift away from fossil fuels/oil .. who are the great tycoons of electrical
grid creeping?

~~~
pm90
Its a good question. I think Tesla is on to something with home Solar re
chargers though. If we transition to a model where every (or sufficiently
many) homes rely on solar power to generate electricity, the increase in EV's
wouldn't much change the demand of electricity from the grid. That seems like
a great solution to prevent the grid from being the bottleneck for the growth
of EV.

(With self-driving cars I see an even better future: drive your car to the
office, then indicate its not required for the next 8 hours. It searches for a
nearby solar recharge station and drives itself, charges itself and returns by
the time you need to leave. Seems like Sci-Fi right now but oh well... I can
still dream )

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rohit2412
While home solar is great, it is nowhere as reliable as the grid. You can have
days when the sun doesn't shine. You expect the grid to bear your super heavy
load (once every home goes ev and solar) on cloudy days and don't use it any
other day. The grid is going to get much more costlier than you know, or there
will be a hefty grid connection fee

~~~
pm90
Let me be clear that I'm not advocating for getting rid of the grid. Like you
said, on days when local generation doesn't meet demand, the grid will be very
useful. What I'm saying is that local generation would supplement the grid;
perhaps make it so that it can handle the additional loads put on it by
millions of Electric Vehicles.

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Anon84
Oil demand has been "peaking" since the 90s...

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stouset
Another commenter replied to your misunderstanding between peak supply and
peak demand, but I’ll address the issue you actually mentioned too.

Since 1980, we have never had a year where we found more untapped oil reserves
than were consumed[1]. Can you explain to me how oil production can continue
keep up with demand when demand outstrips new discoveries — and has, for
nearly forty years?

[1]: [https://dothemath.ucsd.edu/2011/11/peak-oil-
perspective/](https://dothemath.ucsd.edu/2011/11/peak-oil-perspective/)

~~~
adventured
At the same time the Permian has been found to contain tens of billions of
barrels of oil beyond what was anticipated could be extracted just ten years
ago. Undercounting is almost universal throughout oil's industrial history,
and tilts toward there being a lot more.

Pioneer pegs Spraberry/Wolfcamp at 50 billion barrels (and Eagle Ford at 25
billion). The Permian will end up being comparable in size only to Ghawar,
with ~100 billion barrels or more (Pioneer says 150+ billion, other studies
say 70-80 billion, and so on). That's based on today's technology, tomorrow
we'll be able to extract more.

Cross the border into Mexico, you're going to find more massive shale deposits
that we haven't even looked at yet (it doesn't just magically stop at the
Texas border very obviously). That'll happen in the next ten years.

There's $6 or $7 trillion worth of oil in Texas that was almost entirely off
the table as a resource as recently as 2007.

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bcaulfield
When will it make sense for a practical, skinflint commuter to make the
switch?

~~~
toomuchtodo
Is your commute under 40 miles round trip? You can get a Nissan Leaf today for
~$10k used, or $20k-30k new. Or a Chevy Volt, Chevy Bolt, or a reservation for
a Tesla Model 3.

Makes great financial sense, as it's half the cost per mile to drive an EV vs
an internal combustion vehicle [1].

EDIT: I own a Nissan Leaf I paid $10k for. I charge at home (6 cents/kwh, $3
for a full charge), and my employer offers free charging at my parking garage
(which I use whenever I'm not working from home).

[1]
[http://www.umich.edu/~umtriswt/PDF/SWT-2018-1_Abstract_Engli...](http://www.umich.edu/~umtriswt/PDF/SWT-2018-1_Abstract_English.pdf)
WARNING: PDF

~~~
ghostbrainalpha
With the Tax incentive in California, a used Nissan Leaf could effectively
cost $6K used now.

And then if your work or city offers subsidized electric charging stations...
it would definitely be worth switching now.

However I think there is a real chance that a fleet of automatic driving Ubers
may make ride sharing cheaper than buying an electric car for most people.

~~~
pkaye
There are tax incentives in California for used electric cars?

~~~
ghostbrainalpha
Apologies for the bad info... Tax credits for USED electric vehicles are only
happening in Colorado right now.

I forgot how the math on this worked out exactly. But I saw people getting the
Leaf a few months ago for about that amount.

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pwaai
I'm not really convinced we will see oil go away. We've been saying peak oil
since the 70s. The US military as a whole still relies heavily on oil. Burning
oil is still the only reliable propulsion for space programs.

But more importantly the whole global warming, anti-oil movement has been to
minimize the impact of OPEC on US, and put pressure on oil producing nations,
largely Russia.

OPEC remains the only organization to outwit the US by exploiting their
reliance on it. Take a look at the oil shock during Carter's administration.

With fracking the US does not need OPEC/Saudi as they used to and they are
freaking out. The main countries whose economy largely depends on oil have
already suffered the economic consequences: Venezuela, Russia, etc. They also
happen to have earned the ire of US by not submitting to their rule.

Electric cars will still be well out of reach from the rest of the population
(Tesla shareholders/shills will say not for long) and combustion engine will
still be in demand.

It was one thing to confront the US as USSR or when US oil production was low,
it's a whole new ball game now.

It's no coincidence with fracking on US soil, we started to see a decline in
crude oil prices, and oil producing countries panicking.

~~~
rgbrenner
Oil isn't going to disappear because of oil. Oil disappears because of
batteries and the improvements that have been made over decades.

To say oil will win over batteries (where applicable) is to say that either 1)
battery improvements will not continue; or 2) that oil is somehow immune to
economics.

Any discussion of the end of oil without mentioning batteries is incomplete.
They are the driver of the change.

~~~
pwaai
so who is going to replace all the oil that is being used in jets, diesel
trucks in third world countries, tanks, humvees, non-nuclear powered naval
ships?

Tesla built the largest battery producing plant and they are going to meet the
demand? They can't even meet their own supply targets for their cars! Are they
going to retrofit F-22s with batteries? How about a farmer in India, is he
going to be able to afford a Tesla Tractor vs the one he was using since he's
grandfather?

You seem to be absolutely sure that the oil will be replaced by batteries
without taking into a lot of uncertainties around it.

~~~
rgbrenner
Key phrase in my post "where applicable". Naval ships, humvees, tanks, and
diesel trucks can all possibly use batteries. The grid can use batteries
instead of peaker plants too (enabling more renewable energy sources to be
used instead of coal).

But the F22 will still use oil--battery development is no where close to
provide that level of energy-to-weight.

You seem to be arguing that we're talking about ALL oil production. But that's
not true.. we're just talking about the 90+% that is used for transportation.
Removing that--which if battery improvements continue absolutely will happen--
oil will never see the demand it has in the past. It'll be relegated to a
specialty fuel.

~~~
pwaai
your version of 'where applicable' seems to be just about anything. Like you
say F-22 will still use oil and not batteries, but its not just weight but
ease of transportation and economies of scale of pulling oil from the ground
vs. manufacturing and maintaining the whole supply chain.

Transportation in what part of the world? Please be more specific, you made it
sound like countries where people can barely afford to live are suddenly going
to hop onto Tesla grid and their lives change. Who benefits from this
narrative do you think? Definitely not the people who will be shackled into
further debts by purchasing the new paradiagm shift in energy tech.

Until you have an infinite source of energy, the battery is not truly
sustainable. They all have a shelf life, maintenance and harm to the
environment. There's a lot of money thats going to be involved and so will
people profiteering and selling their reality and attacking people who say
otherwise.

