Oil Price Could Fall To $30 If Global Deal Not Extended

(edited)

Even Ferrari is going the Hybrid route.  Their latest car the SF 90 Stradale has 986hp with 220hp delivered by three different electric motors.  One is in the drivetrain and always works and the other two are on the front wheels.  Ferrari has said this is the future of their cars.  The V8 ICE delivers 780hp with twin turbos.  

Edited by wrs
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1 hour ago, Jan van Eck said:

That big taxi fleet is headed for a very rapid change-over to electric, once somebody offers a fast change-out of the battery pack.  (I thought Tesla Model S had that capability??).

I realize this is a quibble, but I figure it can't hurt to point it out: battery swapping won't be necessary.  Cab drivers rarely exceed 200 miles/day, which means an owner/operator could let his vehicle charge overnight.  Cabs running 24/7 in 12 hour shifts could be fast-charged over lunch breaks.  This assumes charging times remain long, but charging times will be shortened, removing this issue. 

Other thoughts on EV cabs: 

Vehicle longevity.  It's exceedingly difficult (Read "expensive") to build an ICE drivetrain that lasts 500,000+ miles without an overhaul.  That means the aforementioned cab running 24/7 barely lasts 5 years.  More likely, it lasts 3-4 years.  Meanwhile, it's trivial to make electrical equipment that lasts 1 million miles, and Tesla claims to be teeing up 1 million mile batteries.  1.5 million miles is within the realm of possibility.  Cab operators will be keen on vehicles that last 3-5 times longer. 

Then there's the issue of maintenance.  The most expensive maintenance item on any vehicle is brakes, and this is exacerbated by stop-and-go city driving.  Thanks to regenerative braking, EVs barely use their brakes.  I asked a Tesla sales representative how long the brake pads last on a Model S.  She said, "We don't know; we haven't had to replace enough of them."  That means you also don't have to replace brake fluid as often.  Also conspicuously absent from EVs:
- Timing belts
- Accessory belts
- Engine oil
- Engine coolant
- Spark plugs
- spark plug wires
- Transmission fluid (they do have gear oil, but this can be a life-of-vehicle component due to lower temperatures & a lack of clutch packs)
- Fuel filter
- Engine air filter
- Lead-acid batteries (Yes, Tesla has a small one for now.  They'll remove it soon.) 
- etc
ICEs  require maintenance roughly every 10,000 miles.  If you're an NYC cab operator running 24/7 - approximately 100,000 miles/year - you lose 5-10 driving days every year.  That's a 1-2% loss in revenue.  The most frequent maintenance item on an EV is the tires.  With the right set of tires, your 5-10 day loss could be cut to 1.  That matters. 

 

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10 hours ago, Jan van Eck said:

Here's the thing: NONE of the problems experienced in those urban settings will be found out in the open countryside.  What drove those projects way up in cost was that they were attempting to build a tunnel through old landfill, kept running into stuff like dumped wood poles, misc. boulders, old pieces of metal scrap, sunken boat or two, that kind of junk.  When boring through the mountains, all you get is plain old ordinary rock.

So  you set up a tunnel-boring machine and have at it.  Let the machine punch its way through and put in those shield panels at the same time. When the machine comes out the other end you have a perfectly lined tunnel and a lot of gravel.  You use the gravel to either build the access ramps or for ballast stone if the tunnel is for a railroad.  If you do it carefully, that tunnel can accommodate both a railway and a truckway  (you let the train go in first, then as soon as the last car clears you hit the green light for the waiting trucks to go follow along).   

These boring machines are mature technology, and you would be surprised how many are available in the used market. Get a dozen of them and get started!   Added bonus:  lots of savings in the snow areas, no road salt costs, tow truck hauls of spun-out rigs,  less damage to busted up trucks. And if you put in that rail track strictly as a bypass, then if the main line gets washed out, your bypass is already there, that freight just keeps on moving!

I believe some of this was done in Europe.  Would the tunnels in North America be of similar length/cost as the tunnels in Europe?  Are we talking about continuous tunnels under an entire mountain range, or simply shaving peaks and filling valleys with a series of small tunnels? 

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On 6/13/2019 at 11:53 AM, AcK said:

Lets talk about Russia in some time.

On your other point - replaced by what exactly. Two answers I get most routinely - (a) within the ambit of trad energy, Shale, and (b) outside the ambit, EVs. On first, already old Shale (Eagle Ford) is already starting to feel the heat of Exhaustion - Bakken will follow soon enough - Permian is both big and will grow for longer, but not perpetuity. So US production will peak out in 5-7 years. On second, EVs are more long term threat to the industry no doubt. But they are woefully short of scale right now. The movement will grow, but make no mistake the next big growth for autos/demand will come from SE Asia, South Asia and Africa next (US/EU are done - China will be more modest growth once the current cycle reverses). And here is where (IMHO) people miss the point about EVs - even when the TCO (total cost of ownership) of EVs comes in-line with ICEs, the Capex (upfront cost) will be more and they will win on Opex (running cost - look ma, no gas!). But emerging market consumers will yet go for the model that is low Capex, since there ability to bear high upfront costs is limited.

ICEs and crude oil demand can sustain (if not grow) for another 10-15 years. And US shale will be a shadow of itself by then.

The problem with Middle East and Russia is there federal budgets are all f***ed up. In terms of economics they can deliver cash profits even at US$20-30 oil. While Shale needs US$40-50 oil to deliver the same. Hence, cant write off OPEC+ so easily.

I believe that natural gas trucking will become a far greater factor than electric cars. It will relieve worries about oil shortages related to political problems, shale declines, trading manipulations etc. Natural gas ships, generators, locomotives, pickups, cars etc. are all in competition worldwide now. http://www.ngvglobal.com/ 

Part Eleven of my Natural Gas Topic https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

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10 hours ago, ronwagn said:

and cannot afford to lose market share.

That's it, Ron; that is the key. Those guys cannot release that market share and walk away, if they do, they end up like Venezuela.  

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1 hour ago, wrs said:

Even Ferrari is going the Hybrid route.  Their latest car the SF 90 Stradale has 986hp with 220hp delivered by three different electric motors.  One is in the drivetrain and always works and the other two are on the front wheels.  Ferrari has said this is the future of their cars.  The V8 ICE delivers 780hp with twin turbos.   

They've said electric is the future of cars, and they're correct.  Even in performance vehicles, electric motors are the superior technology. 

There's also a spectrum of electrification.  In the near future, every ICE will have its auxiliary functions (power steering, A/C, water pump, oil pump) electrified.  Some will have electric motors integrated directly into the ICE or the transmission, as in  Mercedes' new I6.  As batteries & motors improve, hybrids will become PHEVs with progressively larger batteries - just as the Prius has been doing.  Eventually, market share will shift to series HEVs like the Volt, then to BEVs with range extenders like the BMW i3, then to pure BEVs. 

Most ICEs will be replaced by pure electric vehicles.  The only questions are:
1)  How long will the transition take?
2)  What will be the market share of these options as the transition proceeds?

Maybe we skip straight to BEVs.  Maybe we're already past the HEV stage, but series PHEVs have a short run before giving way to pure electrics.  Whatever the case, fuel consumption of all vehicles will decline.

That's the detail I think people miss when they discuss peak oil demand: shades of electrification will make every vehicle more efficient.  It takes roughly 15 million consumer BEVs to reduce oil demand by 0.5MMbpd.  It'll take years to raise BEV production to that level.  Meanwhile, the world sells 80 million vehicles annually, and those vehicles certainly consume 20% less fuel than the old vehicles they replace.  That's 0.5MMbpd of demand destruction.  That means efficiency gains are immediately reducing oil demand as much as we expect BEVs to in the future, and those efficiency gains will only accelerate. 

It'll be interesting to see if the forecasters have underestimated new technology. 

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21 minutes ago, ronwagn said:

I believe that natural gas trucking will become a far greater factor than electric cars. It will relieve worries about oil shortages related to political problems, shale declines, trading manipulations etc. Natural gas ships, generators, locomotives, pickups, cars etc. are all in competition worldwide now. http://www.ngvglobal.com/ 

Part Eleven of my Natural Gas Topic https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

Part Eleven?  How long have you been at this?!?

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2 hours ago, BenFranklin'sSpectacles said:

I realize this is a quibble, but I figure it can't hurt to point it out: battery swapping won't be necessary.  Cab drivers rarely exceed 200 miles/day, which means an owner/operator could let his vehicle charge overnight.  Cabs running 24/7 in 12 hour shifts could be fast-charged over lunch breaks.  This assumes charging times remain long, but charging times will be shortened, removing this issue. 

Ben, I get the impression you are not up to speed on the internal workings of the cabbie industry, as it plays out in congested East Coast cities such as New York/Boston, and even in MidWest cities such as Chicago.  First up, a cab Air conditioner is running constantly, even in mild temps just for dehumidification, the passenger exhalation of water vapor has to be constantly removed.  So that battery is getting a continuous drain of at least 15 hp even if standing still. Next up, in a city such as NYC, where you have to buy a "Medallion" to run a Yellow Cab, the City sells those for over $1 million each; so that cab has to run 24/5, and maybe /6 or /7.  You don't have the luxury of downtime due to the monthly payment on the Note to finance that Medallion.  Lastly, the way a city such as NY is laid out, a cabbie ducks into a streetside diner for lunch, those places have no parking, that cab is propped at a cab stand up the block, those are not going to get fancy re-charge plugs any time soon, so none of that is plausible.  Finally, those cabs are stationed in large garages outside the downtown core, the drivers roll in over an East River bridge at the start of that shift and stay in Manhattan, then roll back to drop the cab, it gets cleaned (hopefully) and the relief driver rolls back into the City for his shift.  And that never stops.  Even then, the drivers are poor; the bulk of the earnings go to the fleet owners and of course to the City, via that humongous price tag for the Medallion  (indeed, operating a cab makes no business sense in NYC.  It is mostly migrants who are poor and do not grasp the hopeless economics who end up wage slaves in those cabs.). 

Bottom line: you want electric cabs, either remove the medallion system  (not likely) or have 5-minute battery swap capability in that car, or you stay with gasoline. 

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10 minutes ago, BenFranklin'sSpectacles said:

It'll be interesting to see if the forecasters have underestimated new technology. 

They always do. 

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On 6/14/2019 at 5:57 AM, BenFranklin'sSpectacles said:

We disagree on a few things:
1)  How long US shale will last
2)  How quickly EVs will destroy oil demand
3)  How much capital costs matter when interest rates are low
4)  The other factors that will reduce oil demand. 

Let's talk about #4:
a)  NG is replacing oil in various applications
b)  Technology exists to reprocess plastics into oil; this technology will be implemented
c)  Technology exists to convert any carbon feedstock into oil; this technology will be implemented
d)  Shale isn't the only source of increased production.  At $50-$70/bbl, there are plenty of sources of oil outside the Middle East
e)  Vehicle efficiency will improve another 20+% without hybridization.  It will improve 40+% on hybrids.  None of this requires the capital costs of EVs. 
f)  Consumer EVs will arrive slowly, but commercial EVs are already being built as quickly as possible.  Their economic case has been made.
g)  States with high fuel prices and oil import dependence will create incentives to purchase EVs.  China and Europe in particular - the two largest importers of oil - are eager to eliminate oil demand. 
h)  Etc.

You get the picture.  Shale oil and EVs are only part of this story.  There are many moving pieces to oil markets, and all of them suggest that Middle Eastern oil is unnecessary. 

Now let's talk about use cases.  EVs make the most sense for vehicles that consume the most fuel.  Consider the following: 
1)  Municipal Bus: 35000 miles/year at 6mpg -> 5800 gallons/year
2)  UPS Truck:  35000 miles/year at 10mpg -> 3500 gallons/year
3)  Line-Haul Truck:  100,000 miles/year at 8mpg -> 12500 gallons/year
4)  Average Commuter:  15000 miles/year at 25mpg -> 600 gallons/year
5)  Me:  5000 miles/year at 30-35 mpg -> 160ish gallons/year

From this, we can see that there's an order of magnitude difference between the best use case and the worst use case.  Will I switch to an EV any time soon?  No.  I don't drive enough.  Will commercial drivers switch as soon as EVs become available?  Absolutely.  Will the average consumer want an EV some time in the next decade?  Most likely. 

That's just use cases.   Consumer behavior is driven by a number of factors, including but not limited to:
1)  What is the consumer's income?  For many people, the cost of an EV is a pittance.
2)  How far does the consumer drive?  There was a mailman in the US who saved money purchasing a Tesla Model S because he drove 100+ miles every day.  There are many US commuters who do the same. 
3)  What government incentives exist?  In China, the government actively discourages ICE purchases, and the population complies.
4)  What does the consumer value?  In the Western world, plenty of people who can't do math want to save the planet.  They'll buy an EV just to virtue signal.
5)  What is the price of fuel?  In America, gasoline is $2-3/gallon.  In Germany, it's $5-6/gallon.  In Hong Kong, it's $8-9/gallon.  Most of the world is $4+/gallon, which is more than enough to justify EVs.
6)  What is the cost of maintenance?  The general population will soon discover how cheap & easy EVs are to maintain.  They'll happily pay more monthly to avoid surprise repairs. 
7)  How is the vehicle being used?  Commercial vehicles that run all day are perfect EV use cases.  With the exception of long-haul trucks, these will electrify as quickly as EVs can be built. 
8 ) What is the interest rate?  The lower the interest rate, the less capital expenses matter.  Interest rates are at historical lows with no sign of increasing. 

Again, you get the picture.  The members of this forum build their oil demand arguments on a Standard EV Consumer, but that consumer doesn't exist.  There is a wide spectrum of consumers, many of whom already benefit from EVs.  As the price of EVs falls, the pool of EV beneficiaries will expand.  My bet is that, within 10 years, the vast majority of customers will benefit from an EV.  That means EV demand will outpace EV battery production for the foreseeable future, which means battery production is the limit on oil demand destruction. 

How quickly can we expand battery production?  With low interest rates and supportive governments, very quickly.  Maintaining a 50% annual increase is feasible, which means most vehicles sold could be EVs within the next decade.  The only way to stop that is for ICE fuel economy to dramatically improve.  Either way, oil demand begins an inexorable decline. 

ICE Vehicles can vastly improve by adopting natural gas as their fuel. I think it is much more realistic for large vehicles than electricity. CNG and LNG infrastructure is growing rapidly around the world. It is serving trucks, cars, and ships.Natural gas costs at least a third less than gasoline or diesel. 

There are currently twice as many natural gas vehicles as there are electric vehicles.They have a lot of catching up to do.

America is not representative of natural gas use in vehicles around the world yet we have the best natural gas pipelines throughout all populated areas. Our supply is virtually unlimited for all practical purposes. 

Natural gas will supply most of the electricity for electric vehicles of all sizes. Why should it have to be turned into electricity first? Does that make sense? Think of how that would overburden our electrical system and require far more construction. How much more vulnerable is our electric system than our natural gas alternative?

 

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4 minutes ago, BenFranklin'sSpectacles said:

Part Eleven?  How long have you been at this?!?

Forever.  :D

Ron is the world's leading expert on this stuff. 

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21 hours ago, AcK said:

Agree case for commercial EVs is stronger than consumer EVs. But I would yet say commercial EVs within the PV (passenger vehicle) category - i.e. Uber, Lyft, Ola, Didi et al.

But there is lot to disagree on as well. China EV share is yet sub-5% of market despite all the incentives. Of course China has not given up so it will improve. Yet not clear on the peak EV/trough ICE scenario.

Care to elaborate on...

>> 1)  Municipal Bus: 35000 miles/year at 6mpg -> 5800 gallons/year /3)  Line-Haul Truck:  100,000 miles/year at 8mpg

Are these EV alternates in the market (or at least in 2020/21 pipeline).

>> a)  NG is replacing oil in various applications

What applications?

Natural gas is replacing gasoline and diesel in ships, trucks, cars, buses etc. It costs about a third less and could be lower if fueled directly through your own pipe. There are currently twice as many natural gas vehicles as electric worldwide.

http://www.ngvglobal.com/

My topic https://docs.google.com/document/d/1_QZTgxCECgIj7EItX9P6Q2J4BjsSt_nPyrDG1zAl4b0/edit

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10 minutes ago, BenFranklin'sSpectacles said:

Part Eleven?  How long have you been at this?!?

Eight years. I started during the last so called "energy crisis". I looked at all the alternative fuels such as "free energy", nuclear, ethanol, coal, solar, wind, geothermal, etc. It took me a couple of years to end up with natural gas as the best long term solution. 

I also cover over 225 other topics. 

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45 minutes ago, BenFranklin'sSpectacles said:

I believe some of this was done in Europe.  Would the tunnels in North America be of similar length/cost as the tunnels in Europe?  Are we talking about continuous tunnels under an entire mountain range, or simply shaving peaks and filling valleys with a series of small tunnels? 

OK, so you have these tunnels in Norway that are some ridiculous length, I think one was about 26 miles.  I don't see that in the US context. What you have in America, referencing the Sierra Nevadas and the Appalachians, are sharp folds of relatively young mountains, with steep sides, and short transverse widths, and then you have the Rockies, which as geologically mature mountains that have undergone quite a bit of weathering and then to have shallower grades and longer transverse widths.  For the short/steep mountains, you can bore away at valley grade, makes no real difference in tunnel length.  For the Rockies, it would be sit-specific but I suspect your tunnels would have an internal up-grade of perhaps 0.5% to 1% and be with entry points mid-slope, and lead-ins.  Take for example Interstate 80 from Salt Lake City up to the Wyoming Plateau.  You have this elevation change that is unavoidable and the advantage of tunnelling is the ability to lower the gradient, which saves on fuel use due to limiting the lugging on those engines. For the Sierras and the Appalachians, just punch your way straight through, longest tunnel might be 5,000 feet, and that is easy enough to do.  Those big trucks never would drop out of top gear, just roll through doing 55.  ☺️

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11 minutes ago, Jan van Eck said:

Ben, I get the impression you are not up to speed on the internal workings of the cabbie industry, as it plays out in congested East Coast cities such as New York/Boston, and even in MidWest cities such as Chicago.  First up, a cab Air conditioner is running constantly, even in mild temps just for dehumidification, the passenger exhalation of water vapor has to be constantly removed.  So that battery is getting a continuous drain of at least 15 hp even if standing still. Next up, in a city such as NYC, where you have to buy a "Medallion" to run a Yellow Cab, the City sells those for over $1 million each; so that cab has to run 24/5, and maybe /6 or /7.  You don't have the luxury of downtime due to the monthly payment on the Note to finance that Medallion.  Lastly, the way a city such as NY is laid out, a cabbie ducks into a streetside diner for lunch, those places have no parking, that cab is propped at a cab stand up the block, those are not going to get fancy re-charge plugs any time soon, so none of that is plausible.  Finally, those cabs are stationed in large garages outside the downtown core, the drivers roll in over an East River bridge at the start of that shift and stay in Manhattan, then roll back to drop the cab, it gets cleaned (hopefully) and the relief driver rolls back into the City for his shift.  And that never stops.  Even then, the drivers are poor; the bulk of the earnings go to the fleet owners and of course to the City, via that humongous price tag for the Medallion  (indeed, operating a cab makes no business sense in NYC.  It is mostly migrants who are poor and do not grasp the hopeless economics who end up wage slaves in those cabs.).  

Bottom line: you want electric cabs, either remove the medallion system  (not likely) or have 5-minute battery swap capability in that car, or you stay with gasoline. 

I'm not sure I agree with 15HP for an air conditioning system.  Maybe on the maximum setting when you first turn on the car, but certainly not to maintain a constant temperature.  There's also the fact that an electrically-driven A/C system will consume far less energy than the traditional mechanically-driven systems because electronic controls allow optimization.  I would guess it's average power draw is no more than 3HP. 

Then there's power draw for other systems and moving the vehicle.  In stop-and-go traffic, you spend a lot of time sitting still or creeping along at low speed.  When you do accelerate, much of that power draw is recuperated through regenerative braking.  Thus, the power draw isn't nearly as high as one would imagine.  Again, we're talking about an EV, so there are no idling losses, acceleration penalties, or other inefficiencies to deal with.  I wouldn't be surprised if an EV cab averaged no more than 7HP throughout the day.  That's optimistic, but as you'll see shortly, this assumption neatly supports my desired conclusion. 

So we need a constant 3HP + 7HP = 10HP to run a NYC cab.  That's 10HP(750W/1HP)(1kW/1000W)(12 hours) = 90kWh/shift.  Tesla already makes a 100kWh car, and future batteries will store even more.  With the technology they just acquired from Maxwell, 100kWh could easily become 115+kWh.  We're within the realm of possibility. 

Now charging.  You're saying that every vehicle returns to a home depot between shifts, which is convenient.  Fast chargers can be installed at the depot.  Presumably, these vehicles are already fueled at the depot, which takes 3-5 minutes.  Possibly longer, since the driver must drive to the fueling station and then to his parking spot.  Call it 5-10 minutes.  He also must be present for the entire fueling process.  With electric charging, the chargers can be placed at the parking spot.  The driver simply plugs it in and walks away.  It can charge while it's being cleaned - or whatever else must be done between shifts.  The new driver unplugs and drives off as soon as the car is ready.  Since we're saving so much money on fuel, repairs, and vehicle capital costs, we can afford to lose a few minutes.  If charging time is reduced to 15 minutes - something industry is already aiming for - we're only a few minutes over the 5-10 minutes it would take to refuel/clean a conventional cab. 

The last question is how this would work in Winter driving conditions.  That might require more power to heat the cab and more power to drive on snowy roads.  I'm not sure how that would work out. 

So you're correct that the technology isn't quite there for the most demanding cab applications.  It's esp. not there for Winter driving.  However, it's getting closer.  If you designed a dedicated cab vehicle with an extra-large battery, it could be done as soon as 15 minute charging times are achieved. 

Another possibility is to stagger the cab driver's schedules and put the fast chargers directly in the depot.  When a driver comes in from his shift, the vehicle pulls directly into the depot for a pit stop: cleaning, recharging, etc.  If the vehicles were identical and you had a couple extras - as I'm sure any cab company does - new drivers could simply use whichever vehicle was ready.  This would be similar to how auto rental companies operate: drivers return vehicles to a queue where employees prep the vehicle (pit stop), and then it's parked, ready for the next driver.  With a cab company, you'd only have a few vehicles in the queue at any given time.  The increased capital expenditure (if any) would be offset by longer vehicle life, reduced vehicle maintenance cost/downtime, and reduce fuel costs. 

What am I missing? 

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32 minutes ago, ronwagn said:

Eight years. I started during the last so called "energy crisis". I looked at all the alternative fuels such as "free energy", nuclear, ethanol, coal, solar, wind, geothermal, etc. It took me a couple of years to end up with natural gas as the best long term solution. 

I also cover over 225 other topics. 

I think you have too much time on your hands. 

But then again, here I am, so I suppose I do too. 

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33 minutes ago, Jan van Eck said:

OK, so you have these tunnels in Norway that are some ridiculous length, I think one was about 26 miles.  I don't see that in the US context. What you have in America, referencing the Sierra Nevadas and the Appalachians, are sharp folds of relatively young mountains, with steep sides, and short transverse widths, and then you have the Rockies, which as geologically mature mountains that have undergone quite a bit of weathering and then to have shallower grades and longer transverse widths.  For the short/steep mountains, you can bore away at valley grade, makes no real difference in tunnel length.  For the Rockies, it would be sit-specific but I suspect your tunnels would have an internal up-grade of perhaps 0.5% to 1% and be with entry points mid-slope, and lead-ins.  Take for example Interstate 80 from Salt Lake City up to the Wyoming Plateau.  You have this elevation change that is unavoidable and the advantage of tunnelling is the ability to lower the gradient, which saves on fuel use due to limiting the lugging on those engines. For the Sierras and the Appalachians, just punch your way straight through, longest tunnel might be 5,000 feet, and that is easy enough to do.  Those big trucks never would drop out of top gear, just roll through doing 55.  ☺️

I hadn't thought about the gradient.  You'd save fuel on the way up the gradient and brakes on the way down it.  Win-win. 

So... why aren't we doing this?

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1 minute ago, BenFranklin'sSpectacles said:

I'm not sure I agree with 15HP for an air conditioning system.  Maybe on the maximum setting when you first turn on the car, but certainly not to maintain a constant temperature.  There's also the fact that an electrically-driven A/C system will consume far less energy than the traditional mechanically-driven systems because electronic controls allow optimization.  I would guess it's average power draw is no more than 3HP. 

Then there's power draw for other systems and moving the vehicle.  In stop-and-go traffic, you spend a lot of time sitting still or creeping along at low speed.  When you do accelerate, much of that power draw is recuperated through regenerative braking.  Thus, the power draw isn't nearly as high as one would imagine.  Again, we're talking about an EV, so there are no idling losses, acceleration penalties, or other inefficiencies to deal with.  I wouldn't be surprised if an EV cab averaged no more than 7HP throughout the day.  That's optimistic, but as you'll see shortly, this assumption neatly supports my desired conclusion. 

So we need a constant 3HP + 7HP = 10HP to run a NYC cab.  That's 10HP(750W/1HP)(1kW/1000W)(12 hours) = 90kWh/shift.  Tesla already makes a 100kWh car, and future batteries will store even more.  With the technology they just acquired from Maxwell, 100kWh could easily become 115+kWh.  We're within the realm of possibility. 

Now charging.  You're saying that every vehicle returns to a home depot between shifts, which is convenient.  Fast chargers can be installed at the depot.  Presumably, these vehicles are already fueled at the depot, which takes 3-5 minutes.  Possibly longer, since the driver must drive to the fueling station and then to his parking spot.  Call it 5-10 minutes.  He also must be present for the entire fueling process.  With electric charging, the chargers can be placed at the parking spot.  The driver simply plugs it in and walks away.  It can charge while it's being cleaned - or whatever else must be done between shifts.  The new driver unplugs and drives off as soon as the car is ready.  Since we're saving so much money on fuel, repairs, and vehicle capital costs, we can afford to lose a few minutes.  If charging time is reduced to 15 minutes - something industry is already aiming for - we're only a few minutes over the 5-10 minutes it would take to refuel/clean a conventional cab. 

The last question is how this would work in Winter driving conditions.  That might require more power to heat the cab and more power to drive on snowy roads.  I'm not sure how that would work out. 

So you're correct that the technology isn't quite there for the most demanding cab applications.  It's esp. not there for Winter driving.  However, it's getting closer.  If you designed a dedicated cab vehicle with an extra-large battery, it could be done as soon as 15 minute charging times are achieved. 

Another possibility is to stagger the cab driver's schedules and put the fast chargers directly in the depot.  When a driver comes in from his shift, the vehicle pulls directly into the depot for a pit stop: cleaning, recharging, etc.  If the vehicles were identical and you had a couple extras - as I'm sure any cab company does - new drivers could simply use whichever vehicle was ready.  This would be similar to how auto rental companies operate: drivers return vehicles to a queue where employees prep the vehicle (pit stop), and then it's parked, ready for the next driver.  With a cab company, you'd only have a few vehicles in the queue at any given time.  The increased capital expenditure (if any) would be offset by longer vehicle life, reduced vehicle maintenance cost/downtime, and reduce fuel costs. 

What am I missing? 

What is the effect of all the ridesharing companies? Uber/Lyft etc ? on cab industry? at some point these companies can demand all their drivers have EV's? and since Uber/Lyft often have financed and leased vehicles to their drivers, they can have entire fleets of EVs

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1 minute ago, ceo_energemsier said:

What is the effect of all the ridesharing companies? Uber/Lyft etc ? on cab industry? at some point these companies can demand all their drivers have EV's? and since Uber/Lyft often have financed and leased vehicles to their drivers, they can have entire fleets of EVs 

Ridesharing would make the problem easier: you're not restricted to 12 hour shifts. 

Would ridesharing companies mandate EVs though?  Not every driver would go for that, and ridesharing only works if there are enough drivers to meet demand.  They might encourage EVs, but I doubt they would mandate them - and even then, there would be no need to encourage something that was economically sound.  If EVs were the cheapest option, operators would flock to them to improve profit margins.  Ridesharing companies would eventually respond by reducing rates, forcing the remaining drivers to adopt EVs. 

I think the market would drive this; no interference required. 

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8 minutes ago, BenFranklin'sSpectacles said:

I think you have too much time on your hands. 

But then again, here I am, so I suppose I do too. 

It started after I retired. I tried horticulture and fixing the drainage on my property the first year. After my greenhouse blew over I decided to save the world. 

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5 minutes ago, BenFranklin'sSpectacles said:

Ridesharing would make the problem easier: you're not restricted to 12 hour shifts. 

Would ridesharing companies mandate EVs though?  Not every driver would go for that, and ridesharing only works if there are enough drivers to meet demand.  They might encourage EVs, but I doubt they would mandate them - and even then, there would be no need to encourage something that was economically sound.  If EVs were the cheapest option, operators would flock to them to improve profit margins.  Ridesharing companies would eventually respond by reducing rates, forcing the remaining drivers to adopt EVs. 

I think the market would drive this; no interference required. 

I am not a fan of EV's yet but I drive several different kinds. I dont know what the rideshare companies would do in terms of mandating the type of vehicles. I think they could do it , if they are financing and leasing the vehicles for their drivers.

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40 minutes ago, ceo_energemsier said:

I am not a fan of EV's yet but I drive several different kinds. I dont know what the rideshare companies would do in terms of mandating the type of vehicles. I think they could do it , if they are financing and leasing the vehicles for their drivers.

I cant imagine pulling up to an oil refinery or an oil refinery site , or to a drill site in an EV LOL :o

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AcK, I was being far too flippant the first time I responded, and I apologize.  That's what I get for posting while exhausted.  Let me try again.

On 6/14/2019 at 1:35 PM, AcK said:

Agree case for commercial EVs is stronger than consumer EVs. But I would yet say commercial EVs within the PV (passenger vehicle) category - i.e. Uber, Lyft, Ola, Didi et al.

I'm not quite following this comment. You would yet say what about commercial EVs within the PV category? 

On 6/14/2019 at 1:35 PM, AcK said:

But there is lot to disagree on as well. China EV share is yet sub-5% of market despite all the incentives. Of course China has not given up so it will improve. Yet not clear on the peak EV/trough ICE scenario.

EVs are still a small fraction of the market, but my point was that current sales matters less than what's coming down the 5-10 year R&D/capital investment pipelines.  Everything about these pipelines suggests that EV sales will compound rapidly.  There may be years of brief pauses in growth, but these pauses are statistical anomalies.  That's what happens when only a handful of products have reached the market.  As more automakers enter the EV space, the curve will smooth into an inexorable rise. 

On 6/14/2019 at 1:35 PM, AcK said:

>> 1)  Municipal Bus: 35000 miles/year at 6mpg -> 5800 gallons/year /3)  Line-Haul Truck:  100,000 miles/year at 8mpg

Are these EV alternates in the market (or at least in 2020/21 pipeline).

Yes. 

1)  Municipal buses are being sold as we speak.  China is already adopting them en masse.  Europe and North America are in the trial stage where municipal operators buy a handful for testing prior to making significant purchases.  We'll see those significant purchases in the next few years. 
2)  Line-Haul trucks are in development.  Tesla Motors is working on a semi with two variants: 300 mile range and 500 mile range.  IIRC, 500 miles covers 70-80% of the trucking market.  Nikola Motors is building a long-haul truck by incorporating a hydrogen fuel cell range extender.  I think of this as a pseudo-electric truck.  As soon as Tesla & Nikola announced their products, Cummins followed suit.  There are probably more offerings, but I stopped reading when I realized the entire industry would follow Tesla & Nikola's lead.  The point is that Class 8 electric trucks are coming, likely within 2 years.

On 6/14/2019 at 1:35 PM, AcK said:

>> a)  NG is replacing oil in various applications

 What applications? 

Effectively all of them.  The only exceptions are trivial cases, such as motorcycles/scooters (these will be electrified) and lawn equipment (these don't consume enough fuel to matter).  Aside from the trivial cases, the combination of LNG and CNG can do anything oil can do:
1)  Methane can be used as a chemical feedstock
2)  High-horsepower engines - tugs, ferries, generators, container ships, etc - are perfect use cases for LNG.  Not only are these being built new as NG vehicles; the old ones are being converted. 
3)  Municipal commercial vehicles, such as buses and delivery trucks, are already being purchased.  E.g. San Antonio is converting their entire fleet of municipal buses to CNG to reduce pollution. 
4)  LNG long-haul trucks are available.  These are esp. useful in areas with high diesel costs. 
5)  CNG variants of passenger vehicles exist.  I believe Italy has the highest market penetration

NG vehicles are nice because they require minimal infrastructure change.  You're still making ICEs in the same factories on the same equipment.  You can even retrofit some of your old engines at minimal cost.  This gives NG the potential to displace oil quickly in the event of price spikes. 

 

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(edited)

On 6/15/2019 at 10:41 PM, BenFranklin'sSpectacles said:

Ridesharing would make the problem easier: you're not restricted to 12 hour shifts. 

Would ridesharing companies mandate EVs though?  Not every driver would go for that, and ridesharing only works if there are enough drivers to meet demand.  They might encourage EVs, but I doubt they would mandate them - and even then, there would be no need to encourage something that was economically sound.  If EVs were the cheapest option, operators would flock to them to improve profit margins.  Ridesharing companies would eventually respond by reducing rates, forcing the remaining drivers to adopt EVs. 

I think the market would drive this; no interference required. 

Now we are getting the question I have been dying to ask...

One of the elements that we are ingrained in fund management is to seek data to prove/disprove theories. Theoretically EVs for commercial use make more sense - and I agree with that assessment - have not seen much evidence around it.

US total auto/PV sales were around 17mn last year (give or take a few thousand). EV sales were 360K. I am not sure what the HEV sales were (or if they are included in the 360K number). So around 2% share in total sales.

Anyone has data on how much of this was Uber/Lyft - or auto/PVs for commercial use in general. Or data for China?

Then we can come to the argument why/why not - and what we are missing from the picture if not.

PS: Another big risk we see to your coming through is Tesla balance sheet - being poster boy for the EV industry, any potential recession risk would be damning for Tesla and push back any estimates (as they are) for EV domination. But that is hypothetical for now.

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7 minutes ago, AcK said:

Now we are getting the question I have been dying to ask... 

One of the elements that we are ingrained in fund management is to seek data to prove/disprove theories. Theoretically EVs for commercial use make more sense - and I agree with that assessment - have not seen much evidence around it.

US total auto/PV sales were around 17mn last year (give or take a few thousand). EV sales were 360K. I am not sure what the HEV sales were (or if they are included in the 360K number). So around 2% share in total sales.

Anyone has data on how much of this was Uber/Lyft - or auto/PVs for commercial use in general. Or for China?

Then we can come to the argument why/why not - and what we are missing from the picture if not.

PS: Another big risk we see to your coming through is Tesla balance sheet - being poster boy for the EV industry, any potential recession risk would be damning for Tesla and push back any estimates (as they are) for EV domination. But that is hypothetical for now.

Sales data is all fine and well, but everyone has access to that.  I don't imagine there's much advantage to be had trading information everyone has access to.  The best way to gather evidence is to figure out who plays in a given field and study what's in their pipeline.  Of course, that requires expert knowledge of the field.  I.e. you'd need to hire fierce technical competence - something that's hard to come by. 

EVs are in their infancy.  Right now, we're only seeing the first, crude examples applied sparingly to collect real-world data.  As the data is collected, the necessary components are designed, the mines are dug, and the factories are retooled, 2% will compound rapidly.

For examples of >2% adoption rates in commercial vehicles, look at:
1)  Municipal buses.  There are entire cities in China that have switched to 100% electric buses, with the remaining cities transitioning as quickly as those buses can be built.  The rest of the world will soon follow suit. 
2)  DHL, which is switching to an all-electric delivery fleet.

For use cases that will soon electrify, look at:
1)  Terminal trucks
2)  Logistics companies (E.g. UPS), which are trialing EVs
3)  Waste disposal trucks.  The first EVs have been produced and are undergoing real-world testing
4)  Ferries

There are certainly more, but that's all I can think of offhand. 

As a side note, I appreciate the tip on how fund managers make decisions.  I might be able to turn my technical knowledge into trading profits. 

 

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