Is the oil & gas industry on the way out?

[Wombat + 1,028]

https://oilprice.com/Energy/Energy-General/Big-Oils-Petrochemical-Bet-Has-Hit-A-Snag.html

[Gerry Maddoux + 3,627]

Yep, that stalwart of journalism, Nick Cunningham, has hit one out of the park again: if the price of a barrel of oil stays down the renewables take over and the oil companies go broke but if the price of oil goes up the renewables take over more quickly.

Wow! Just wow!

How can one man's brain reach such exquisite heights?

 

[Wombat + 1,028]

27 minutes ago, Gerry Maddoux said:

Yep, that stalwart of journalism, Nick Cunningham, has hit one out of the park again: if the price of a barrel of oil stays down the renewables take over and the oil companies go broke but if the price of oil goes up the renewables take over more quickly.

Wow! Just wow!

How can one man's brain reach such exquisite heights?

 

Now now Gerry, I think the main point is that the industry has already peaked, or is very close to it. Not just due to renewables, but less plastic use as well. My guess is that the over-supply will persist for up to a decade, and that Western petro-chemical sector will shrink as Asian production increases, just as happened in steel and Aluminium? I still expect US production to bounce back somewhat, but I think a lot of European refineries and petro plants will close. The relative strength of currencies is the driving factor, along with wage disparaties. Australia has already shut down most refineries, and we now import more finished product than we refine. Once the Asians have built all their new refineries, they will discover what a collossal waste of money because EV's are about to get much cheaper. I agree with Nick, the next oil boom is likely to be short-lived and probably be the last. Shell and Chevron certainly think so?

[Gerry Maddoux + 3,627]

The world will get a chance to run an experiment on your thesis: 

U.S. rig count 250: down 700 from this time last year. Canada rig count 25--down 90.

Libya is a basket case. Venezuela is down to one rig (1). Reserves are one-half in KSA. 

We are in for the mother of all oil shocks: maybe by this time next year. If either the strait of Malacca or the strait of Hormuz gets hit, or if someone puts something ballistic on KSA gumworks, oil will be at an incredible premium. 

At a time when Tesla stock is going up 10% a day and oil stocks are falling by the same amount, on the heels of paying someone $47 to haul off a barrel of oil, it might not seem it, but run the numbers, for Pete's sake. And I wouldn't be too quick to let someone else refine my oil either: friends are friends until they're not. This old world is tightening up. The United States is no longer watchman of the world. Some very bad things are apt to happen. Anyone who doesn't think another bad coronavirus is incubating is nuts. Things are never stable. I could go on with this dystopian riff but I've come to the end of my adjectives. 

[Strangelovesurfing + 737]

10 minutes ago, Gerry Maddoux said:

Anyone who doesn't think another bad coronavirus is incubating is nuts. Things are never stable. I could go on with this dystopian riff but I've come to the end of my adjectives. 

You sir, are spot on. I think this would be virus #5 out of the CCP kingdom since the year 2000.

 https://www.cnbc.com/2020/06/30/new-strain-of-flu-in-china-has-pandemic-potential-scientists-warns.html

[Ward Smith + 6,615]

30 minutes ago, Gerry Maddoux said:

The United States is no longer watchman of the world.

Thumbs up for the shout-out. Many furriners here won't get the joke. They don't understand my avatar either.  😎

[Strangelovesurfing + 737]

39 minutes ago, Ward Smith said:

Thumbs up for the shout-out. Many furriners here won't get the joke. They don't understand my avatar either.  😎

That HBO mini-series was as good as the movie IMO.

[ronwagn + 6,290]

8 hours ago, Wombat said:

Now now Gerry, I think the main point is that the industry has already peaked, or is very close to it. Not just due to renewables, but less plastic use as well. My guess is that the over-supply will persist for up to a decade, and that Western petro-chemical sector will shrink as Asian production increases, just as happened in steel and Aluminium? I still expect US production to bounce back somewhat, but I think a lot of European refineries and petro plants will close. The relative strength of currencies is the driving factor, along with wage disparaties. Australia has already shut down most refineries, and we now import more finished product than we refine. Once the Asians have built all their new refineries, they will discover what a collossal waste of money because EV's are about to get much cheaper. I agree with Nick, the next oil boom is likely to be short-lived and probably be the last. Shell and Chevron certainly think so?

Reality, and there are virtually no electric trucks or ships although hybrids are an option and more realistic. 

https://en.wikipedia.org/wiki/Electric_car_use_by_country#/media/File:FOTW_Market_shares_EV_China_EU_US_2015_2019.png

A larger population will also need more energy, from whatever source. 

https://www.statista.com/statistics/183481/united-states-population-projection/

Edited July 11, 2020 by ronwagn
added reference

[Ward Smith + 6,615]

18 minutes ago, ronwagn said:

Reality, and there are virtually no electric trucks or ships although hybrids are an option and more realistic. 

https://en.wikipedia.org/wiki/Electric_car_use_by_country#/media/File:FOTW_Market_shares_EV_China_EU_US_2015_2019.png

Norway has such massive penetration of EV because the govt basically pays you to buy an electric vehicle and essentially let's you charge for free. Amazing how they've built up a trillion dollar sovereign wealth find on oil and done everything in their power to distance themselves from it. I have several friends in the oil industry in Stavangar there, they all own electric cars and un-ironically complain about low oil prices. 

[Wombat + 1,028]

3 hours ago, ronwagn said:

Reality, and there are virtually no electric trucks or ships although hybrids are an option and more realistic. 

https://en.wikipedia.org/wiki/Electric_car_use_by_country#/media/File:FOTW_Market_shares_EV_China_EU_US_2015_2019.png

A larger population will also need more energy, from whatever source. 

https://www.statista.com/statistics/183481/united-states-population-projection/

Thankyou for adding to the discussion Ron. The answer to the question obviously depends on a lot of "what-ifs" at this stage, so I am hoping to get as many angles on it as possible.

[Wombat + 1,028]

3 hours ago, ronwagn said:

Reality, and there are virtually no electric trucks or ships although hybrids are an option and more realistic. 

https://en.wikipedia.org/wiki/Electric_car_use_by_country#/media/File:FOTW_Market_shares_EV_China_EU_US_2015_2019.png

A larger population will also need more energy, from whatever source. 

https://www.statista.com/statistics/183481/united-states-population-projection/

Ron, your own graphs show that EV sales in China and Europe rising at a fairly rapid pace, interesting to see what happens in US. Thing is, let's say those graphs in China and Europe keep rising steadily for next 3 years, and China hits 9% by 2023, and Europe 7%. That in itself would be devastating blow for oil industry. A larger pop'n on it's own does not guarantee much extra energy demand. According to the experts, the global pop'n is going to rise from current 7bn to 8 bn by 2050. But guess what? Number of ppl under 65 not expected to grow AT ALL! That's right, the whole extra billion due entirely to greying of global pop'n, and there will be 1bn extra "over 65's", not a single person extra under that age! So any extra demand for oil mainly going to come from growth of middle class in EM economies, which most likely be completely offset by falling demand in the West due to (1) greying pop'n (2) more EV's (3) more efficient ICE's. US and Euro consumption of oil has already been falling for about 5 years, the trend about to accelerate. There is too many countries want to produce oil, who will give up their share and how will it be forced upon them? By market forces or politics/war?

[Jan van Eck + 7,558]

First up, I would rather dourly state that oil use is not going downhill any time soon, if ever.  The world has a huge, gigantic, staggering investment in capital goods that are focused on oil and oil derivatives such as plastics.  The idea that all this is simply going to evaporate is not tenable - that dog won't hunt.  If you think of the billions of IC engines out there, is that just going to vanish?  To be replaced by - what, exactly?  Electric motors?   Not going to happen, sorry. 

As to the suggestion that plastics are peaked and use is going to decline, that is not credible.  Plastics are both a commodity good and an engineering material; their use is as substitute for other materials, and the substitution between goods is a function of the utility of the material and the costs involved in manufacture.  In a very simplified version, if plastics becomes cheaper than say glass, then containers will shift to plastics - and vice versa.  Plastics have substituted for wood and steel in small-boat construction for ease of maintenance, and formability in a mold for lower-cost production.  If plastics get very expensive, then it goes the other way.  Plastics composites have made inroads into aluminum for aircraft parts, and in some cases for the entire aircraft hull, again for cost and maintenance factors.  Plastics even substitutes for wood for the manufacture of park benches, as a durable, rot-proof material.  Plastics is not going anywhere; it will continue.  And as oil prices decline, the manufacture and use of commodity plastics will increase, crowding out other materials. 

Finally, the world population is not going to increase, it is already at peak, and dropping fast in the developed world.  Fecundity rates continue to plunge.  They stay up in the world backwaters, places where women are oppressed and acid thrown in their faces for attending elementary school.  Once you get past those shithole countries the fecundity rates show dramatic drop.  Admittedly India remains troubling, with a fecundity rate currently of around 2.3,  but that again is more likely than not to drop dramatically as education comes to the hinterlands.   Convincing 500 million people who still poop on the street and have no house toilet as a matter of personal choice is admittedly an uphill battle, but as the Chinese have demonstrated, "one child" is entirely possible.  I see even ridiculously backwards India as eventually getting its act together. 

Will oil be the energy choice of the future for these countries?  Yes, it will.  Oil will continue to dominate. 

[surrept33 + 609]

3 hours ago, Jan van Eck said:

First up, I would rather dourly state that oil use is not going downhill any time soon, if ever.  The world has a huge, gigantic, staggering investment in capital goods that are focused on oil and oil derivatives such as plastics.  The idea that all this is simply going to evaporate is not tenable - that dog won't hunt.  If you think of the billions of IC engines out there, is that just going to vanish?  To be replaced by - what, exactly?  Electric motors?   Not going to happen, sorry. 

As to the suggestion that plastics are peaked and use is going to decline, that is not credible.  Plastics are both a commodity good and an engineering material; their use is as substitute for other materials, and the substitution between goods is a function of the utility of the material and the costs involved in manufacture.  In a very simplified version, if plastics becomes cheaper than say glass, then containers will shift to plastics - and vice versa.  Plastics have substituted for wood and steel in small-boat construction for ease of maintenance, and formability in a mold for lower-cost production.  If plastics get very expensive, then it goes the other way.  Plastics composites have made inroads into aluminum for aircraft parts, and in some cases for the entire aircraft hull, again for cost and maintenance factors.  Plastics even substitutes for wood for the manufacture of park benches, as a durable, rot-proof material.  Plastics is not going anywhere; it will continue.  And as oil prices decline, the manufacture and use of commodity plastics will increase, crowding out other materials. 

Finally, the world population is not going to increase, it is already at peak, and dropping fast in the developed world.  Fecundity rates continue to plunge.  They stay up in the world backwaters, places where women are oppressed and acid thrown in their faces for attending elementary school.  Once you get past those shithole countries the fecundity rates show dramatic drop.  Admittedly India remains troubling, with a fecundity rate currently of around 2.3,  but that again is more likely than not to drop dramatically as education comes to the hinterlands.   Convincing 500 million people who still poop on the street and have no house toilet as a matter of personal choice is admittedly an uphill battle, but as the Chinese have demonstrated, "one child" is entirely possible.  I see even ridiculously backwards India as eventually getting its act together. 

Will oil be the energy choice of the future for these countries?  Yes, it will.  Oil will continue to dominate. 

Oil might peak out sooner than you think given oil's potential substitution with NG as petrochemical feedstock,  the natural 15~-ish year replacement cycle (and relative technological maturity) of an average ICE engine, the economic learning curves of renewables, potential drags on demand growth caused by things like carbon taxes and other regulation, and the developing world potentially leapfrogging levels of technology (i.e, for example, large swathes of Africa leapfrogging directly over the copper-wired telephone directly to cellular). These are all real concerns if you are a decision maker who is exposed in some way to oil.

I think projected oil usage really depends on the industry and usage in question. For some types of usage, oil is much more of a substitutable good than others, both in terms of making the economics work and where the maturity of the alternatives is.

I think if you follow current long term trends, there is a general expectation that the slope in regulation of anything that emits greenhouse gasses will continue, including carbon dioxide.  Different people can come to different conclusions about what that slope of regulation should be, but my point is that if you're a decision maker in any industry that needs to assess regulatory risk re: greenhouse gasses, you are most likely paying very close to Scope 1/Scope 2/Scope 3 emissions: https://en.wikipedia.org/wiki/Carbon_emissions_reporting (this is Americacentric, but this holds true in many other countries, including say, China and the EU) and assessing what your company's sensitivity to changes in regulatory structure might look like.

This can change the economics quickly and has already shifted where investments go, but in terms of substitution of hydrocarbons for each other (especially coal to NG), substitution of hydrocarbons with renewables (which is just starting, but has greatly accelerated the learning curves of many renewable technologies), and facilitation of the carbon offset market.

Technology substitution almost always works in "S"-curves (like a sigmoid). Initially, there are low rates of substitution due to incumbency effects, then rapid changes as economies of scale build up (and an apex of diminishing returns and capital depreciation with incumbent technology/capital stock).

Edited July 11, 2020 by surrept33

[ronwagn + 6,290]

11 hours ago, Ward Smith said:

Norway has such massive penetration of EV because the govt basically pays you to buy an electric vehicle and essentially let's you charge for free. Amazing how they've built up a trillion dollar sovereign wealth find on oil and done everything in their power to distance themselves from it. I have several friends in the oil industry in Stavangar there, they all own electric cars and un-ironically complain about low oil prices. 

Thank you very much for that information I will project a backlash against electric recharging because of cluttering up areas and our states or federal government wanting to subsidize all of that. Early adopters in California do not necessarily affirm that electric vehicles are going to take over unless mandated, and supported by ALL the taxpayers.

The Democrat platform will include a GREEN fuel mandate that will decrease fossil fuels through artificial means. It will aim to eliminate all fossil fuels by 2050. The stupidity to even suggest such a thing should warn every voter that these people are out of touch with reality and catering to the far left. They are promising high paying union jobs to all those who go into the GREEN new world in their imagination. How has that worked out in California with their "fast" train to nowhere? It has wasted billions of dollars to do something that could have been easily and comparatively cheaply accomplished with natural gas fueled buses. 

https://www.foxnews.com/politics/california-to-pull-plug-on-billion-dollar-bullet-train-cites-ballooning-costs

https://en.wikipedia.org/wiki/California_High-Speed_Rail

Edited July 11, 2020 by ronwagn
added reference

[ronwagn + 6,290]

9 hours ago, Wombat said:

Ron, your own graphs show that EV sales in China and Europe rising at a fairly rapid pace, interesting to see what happens in US. Thing is, let's say those graphs in China and Europe keep rising steadily for next 3 years, and China hits 9% by 2023, and Europe 7%. That in itself would be devastating blow for oil industry. A larger pop'n on it's own does not guarantee much extra energy demand. According to the experts, the global pop'n is going to rise from current 7bn to 8 bn by 2050. But guess what? Number of ppl under 65 not expected to grow AT ALL! That's right, the whole extra billion due entirely to greying of global pop'n, and there will be 1bn extra "over 65's", not a single person extra under that age! So any extra demand for oil mainly going to come from growth of middle class in EM economies, which most likely be completely offset by falling demand in the West due to (1) greying pop'n (2) more EV's (3) more efficient ICE's. US and Euro consumption of oil has already been falling for about 5 years, the trend about to accelerate. There is too many countries want to produce oil, who will give up their share and how will it be forced upon them? By market forces or politics/war?

Ok, I see your point and it is very well stated. What about the Third World that is starting to use more energy. They make up most of the world's population. I think that will be the biggest change. I think that my favorite, natural gas, plus gasoline and diesel will remain the favorite choice among those people and will be abundant enough to get them on track to greatly increase their quality of life as they mechanize their agriculture and machinery to create a better lifestyle. A large rototiller and a good water pump, generator, and water drilling rig can make big improvements. Transportation will be needed to connect villages for commerce. 

[ronwagn + 6,290]

5 hours ago, Jan van Eck said:

First up, I would rather dourly state that oil use is not going downhill any time soon, if ever.  The world has a huge, gigantic, staggering investment in capital goods that are focused on oil and oil derivatives such as plastics.  The idea that all this is simply going to evaporate is not tenable - that dog won't hunt.  If you think of the billions of IC engines out there, is that just going to vanish?  To be replaced by - what, exactly?  Electric motors?   Not going to happen, sorry. 

As to the suggestion that plastics are peaked and use is going to decline, that is not credible.  Plastics are both a commodity good and an engineering material; their use is as substitute for other materials, and the substitution between goods is a function of the utility of the material and the costs involved in manufacture.  In a very simplified version, if plastics becomes cheaper than say glass, then containers will shift to plastics - and vice versa.  Plastics have substituted for wood and steel in small-boat construction for ease of maintenance, and formability in a mold for lower-cost production.  If plastics get very expensive, then it goes the other way.  Plastics composites have made inroads into aluminum for aircraft parts, and in some cases for the entire aircraft hull, again for cost and maintenance factors.  Plastics even substitutes for wood for the manufacture of park benches, as a durable, rot-proof material.  Plastics is not going anywhere; it will continue.  And as oil prices decline, the manufacture and use of commodity plastics will increase, crowding out other materials. 

Finally, the world population is not going to increase, it is already at peak, and dropping fast in the developed world.  Fecundity rates continue to plunge.  They stay up in the world backwaters, places where women are oppressed and acid thrown in their faces for attending elementary school.  Once you get past those shithole countries the fecundity rates show dramatic drop.  Admittedly India remains troubling, with a fecundity rate currently of around 2.3,  but that again is more likely than not to drop dramatically as education comes to the hinterlands.   Convincing 500 million people who still poop on the street and have no house toilet as a matter of personal choice is admittedly an uphill battle, but as the Chinese have demonstrated, "one child" is entirely possible.  I see even ridiculously backwards India as eventually getting its act together. 

Will oil be the energy choice of the future for these countries?  Yes, it will.  Oil will continue to dominate. 

India should turn that poop into biogas and all of their sacred cow poop etc. That alone would create enough biogas for cooking and lighting. Maybe someone here knows how much biogas they produce and use. I am all for solar and wind in rural areas also. Generators are fine too, and can, if desired, be switched to natural gas/gasoline/diesel dual or triple fuel. I understand that India has loads of engineers. They should be working on rural development for a higher standard of living. The Third world needs plumbing or at least plenteous water and quality outhouses. I wonder how many small farms have rototillers and fuel and how many people have mopeds or cheap vehicles to use. Maybe someone here can tell me more. 

If you could be a citizen of India, or China, which would you choose. What other "Third World" country would you prefer? OK, only parts of China are Second or Third World. Same with almost all of the "Third World". 

[Jan van Eck + 7,558]

5 minutes ago, ronwagn said:

If you could be a citizen of India, or China, which would you choose.

Neither!

6 minutes ago, ronwagn said:

What other "Third World" country would you prefer?

Uruguay.  I could handle Montevideo.  Nice beaches. 

 

7 minutes ago, ronwagn said:

Maybe someone here knows how much biogas they produce and use.

None. 

[specinho + 470]

When the resource is there but with misunderstood function.......... Do you blame the wall or the swing? Or the builder?

The number of uncontrolled usages could be one of the key factors. What are we doing arguing if the wall (renewable energy) or the swing (oil and gas) is more important?

[0R0 + 6,251]

22 hours ago, Wombat said:

Now now Gerry, I think the main point is that the industry has already peaked, or is very close to it. Not just due to renewables, but less plastic use as well. My guess is that the over-supply will persist for up to a decade, and that Western petro-chemical sector will shrink as Asian production increases, just as happened in steel and Aluminium? I still expect US production to bounce back somewhat, but I think a lot of European refineries and petro plants will close. The relative strength of currencies is the driving factor, along with wage disparaties. Australia has already shut down most refineries, and we now import more finished product than we refine. Once the Asians have built all their new refineries, they will discover what a collossal waste of money because EV's are about to get much cheaper. I agree with Nick, the next oil boom is likely to be short-lived and probably be the last. Shell and Chevron certainly think so?

The oil demand picture is quite bad as the 3rd world is only developing as a result of Chinese commodity colonial imperialism funded by perpetually rolled over debt that is not repaid nor floated to investors. All part of their Great Leap Forward version 3.0 - "Belt and Road". Stop the loss making Chinese investment, and the 3rd world's impediments to capital formation transportation agriculture and production kick back in. They run out of financing by 2025, so that will be it.

NG and NGL is substituting for oil in plastics production up to poly butelenes, but benzene based stuff is going to have to continue to come from oil. That is not going away in volumes. It continues to grow in demand as it replaces wood, glass, steel and aluminum. It makes possible production of parts that were otherwise expensive, meaning that as the additive and composite production processes go up the learning curve, prices will fall and demand will rise.

LNG is displacing shipping fuel. Even at current low prices, bunker fuel is more expensive by a factor of 2-3 than LNG. Dual fuel conversion of ships and new LNG trucks are ongoing trends that will continue so long as capital continues escaping China and Japan etc.

As for "green" tech displacing NG for electricity, it is a big YES for the few daily hours they are available. There is where "cheap" ends. That covers 30% of electric production where the technology is feasible because of easy sunlight conditions like in Australia's desert or the US Southwest. Or wind in the Texas corridor, US offshore in the NE and NW, off the Western Australian coast, and NW Europe. Assuming the offshore floating masts actually succeed commercially (the sea floor based ones are too expensive to build even for the best wind corridors). Elsewhere it is a question of subsidizing storage and transmission lines, which is only doable while interest rates remain low. Post the baby boomer retirement transition, that is highly unlikely. It was going to happen in 2024-2027 in the US, Europe, China, Asian Tigers, Brazil, etc. but it is being pulled forward as CV19 is scaring the near retirees to go home earlier than planned. That will see a reversal of global savings volumes, led by China. That means that the capital cost of the "green" projects will hinder them compared to NG combined cycle, which costs 1.10th upfront. It is one thing to claim cheap when you are paying negative real interest rates, it is another thing entirely when real interest rates are 5% and nominal closer to10%.

Similarly for EVs, unless Tesla and competitors manage to bring initial costs down to easily financed levels and expand to big trucks and SUVs that are functional at their ICE version's prices, then the adoption will continue to be slow despite the remarkably low operating costs. Because the adoption that exists depends on the low interest rates prevailing the last decade and today. Another impediment is the inexperience with the EV car's latter years - battery life, cost of replacement of old ones, high torque motor's life expectancy in the real world. We just don't know how long and how well they last. Official costs on replacement batteries are higher than a new EV so far, so out of warranty means out of luck.

There will be a spike in oil prices and then an elevated plateau till shut in production fills in the space not plugged by re-expanding shale and Saudi's new gas field that should displace some of their oil consumption.

Re Norway, they want to keep their oil export forex income going as long as possible, which is why they find it net positive to subsidize domestic conversion to EVs.

[0R0 + 6,251]

1 hour ago, ronwagn said:

If you could be a citizen of India, or China, which would you choose. What other "Third World" country would you prefer? OK, only parts of China are Second or Third World. Same with almost all of the "Third World". 

China only graduates 25% of its people from high school. Of those, nearly 30% are now reaching some sort of quasi college education or actual university degrees. The sad part of that statistic is that the rise from 10% to 30% of high school grads getting more education is that there are 30% fewer of them - or worse. So the departure from the old ratio is less an improvement than meets the eye, as less qualified students get educated while capacity has only expanded by 50% and the quality of that expansion is weak. so much of it being cram schools..

That is why China is a second and third world country while its 1st world portion is crammed into coastal cities and Beijing. Estimates of China's 1st world population ranges from 200-300 million.

[Ward Smith + 6,615]

7 hours ago, surrept33 said:

i.e, for example, large swathes of Africa leapfrogging directly over the copper-wired telephone directly to cellular

The real reason this happened had nothing to do with "leapfrogging". My friend was there during the phone line installation. He said every day they'd string so many miles of new line, and every night the locals would steal every inch of it. If they could figure out a way to steal a cell tower they would. 

[Ward Smith + 6,615]

47 minutes ago, 0R0 said:

China only graduates 25% of its people from high school. Of those, nearly 30% are now reaching some sort of quasi college education or actual university degrees. The sad part of that statistic is that the rise from 10% to 30% of high school grads getting more education is that there are 30% fewer of them - or worse. So the departure from the old ratio is less an improvement than meets the eye, as less qualified students get educated while capacity has only expanded by 50% and the quality of that expansion is weak. so much of it being cram schools..

That is why China is a second and third world country while its 1st world portion is crammed into coastal cities and Beijing. Estimates of China's 1st world population ranges from 200-300 million.

@Marcin won't be happy with those stats. He's convinced that genius is just a numbers game, little understanding that true genius requires circumstances to all roll the right way. For instance, we'd never have heard of Sir Isaac Newton if his (wealthy enough) parents hadn't sent him off to the countryside to avoid the plague. Had he merely been intelligent instead of well educated, he might well have become Fagin as a small time crime lord, rather than a peer of the realm. 

[MZarco 0]

10 hours ago, Jan van Eck said:

First up, I would rather dourly state that oil use is not going downhill any time soon, if ever.  The world has a huge, gigantic, staggering investment in capital goods that are focused on oil and oil derivatives such as plastics.  The idea that all this is simply going to evaporate is not tenable - that dog won't hunt.  If you think of the billions of IC engines out there, is that just going to vanish?  To be replaced by - what, exactly?  Electric motors?   Not going to happen, sorry. 

As to the suggestion that plastics are peaked and use is going to decline, that is not credible.  Plastics are both a commodity good and an engineering material; their use is as substitute for other materials, and the substitution between goods is a function of the utility of the material and the costs involved in manufacture.  In a very simplified version, if plastics becomes cheaper than say glass, then containers will shift to plastics - and vice versa.  Plastics have substituted for wood and steel in small-boat construction for ease of maintenance, and formability in a mold for lower-cost production.  If plastics get very expensive, then it goes the other way.  Plastics composites have made inroads into aluminum for aircraft parts, and in some cases for the entire aircraft hull, again for cost and maintenance factors.  Plastics even substitutes for wood for the manufacture of park benches, as a durable, rot-proof material.  Plastics is not going anywhere; it will continue.  And as oil prices decline, the manufacture and use of commodity plastics will increase, crowding out other materials. 

Finally, the world population is not going to increase, it is already at peak, and dropping fast in the developed world.  Fecundity rates continue to plunge.  They stay up in the world backwaters, places where women are oppressed and acid thrown in their faces for attending elementary school.  Once you get past those shithole countries the fecundity rates show dramatic drop.  Admittedly India remains troubling, with a fecundity rate currently of around 2.3,  but that again is more likely than not to drop dramatically as education comes to the hinterlands.   Convincing 500 million people who still poop on the street and have no house toilet as a matter of personal choice is admittedly an uphill battle, but as the Chinese have demonstrated, "one child" is entirely possible.  I see even ridiculously backwards India as eventually getting its act together. 

Will oil be the energy choice of the future for these countries?  Yes, it will.  Oil will continue to dominate. 

 

[ronwagn + 6,290]

9 hours ago, Ward Smith said:

The real reason this happened had nothing to do with "leapfrogging". My friend was there during the phone line installation. He said every day they'd string so many miles of new line, and every night the locals would steal every inch of it. If they could figure out a way to steal a cell tower they would. 

Like Nigerians stealing gasoline from the pipelines. Sometimes getting burned up in the process. 

[ronwagn + 6,290]

11 hours ago, Jan van Eck said:

Neither!

Uruguay.  I could handle Montevideo.  Nice beaches. 

 

None. 

Please see https://blog.anaerobic-digestion.com/biogas-in-india/