Peak Shale Will Send Oil Prices Sky High

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54 minutes ago, Wombat said:

 

I disagree that dollar index will fall, that is exact opposite to what happened during GFC during ZIRP + QE? Corona Virus will have same effect? Everybody will turn to USD haven again?

Yes, but there are a trillion of unhedged dollar carry trades from Yen and Euro funding into the US which need to be unwound first, as US investors are heavily moving into Treasuries to produce lower rates. The charts for long bonds indicate a <1% 10 year this year and 30 year yields are heading to 1.5%. If the Fed doesn't cut now and rapidly after, the entire curve will be thoroughly inverted again and funding and liquidity issues will pop up everywhere..

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4 hours ago, BenFranklin'sSpectacles said:

Get paid to argue with people?  Sure!  That's my dream job. 

Isn't that what politicians do?

[Wombat + 1,028]

16 minutes ago, 0R0 said:

How so?

Restrictions on importing US product?

Nope, just lack of demand.

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9 hours ago, Rasmus Jorgensen said:

First the oilprice will fall; then as marginal production starts to disappear and even fewer new conventional fields are put into production we are going to see spikes. As oil spikes EVs will be even more attractive. We will still need oil for petchem and my guess air and other heavy transportation, but large parts of society will electrify because cost on on par or cheaper and as the electric infrastructure builds out oils current infrastructure advantage will disappear.

EVs are already cheaper than gasoline to run and maintain. The problem has always been the initial capital outlay for the Neo motor and Li copper graphene or cobalt batteries. Cheap lithium solved it for now because there is a glut. Further adoption will sop up current capacity and create a tight market again. Last time, it took 4 years for new production to hit the market. 

Breakeven gasoline is just North of $1.25 for a midsize sedan.

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2 minutes ago, Wombat said:

Nope, just lack of demand.

For which products

[Wombat + 1,028]

10 minutes ago, 0R0 said:

Yes, but there are a trillion of unhedged dollar carry trades from Yen and Euro funding into the US which need to be unwound first, as US investors are heavily moving into Treasuries to produce lower rates. The charts for long bonds indicate a <1% 10 year this year and 30 year yields are heading to 1.5%. If the Fed doesn't cut now and rapidly after, the entire curve will be thoroughly inverted again and funding and liquidity issues will pop up everywhere..

Good point, and I thoroughly agree that Fed needs to move fast, but even tho carry traders also looking at using the Aussie as funding currency, I just think the amount of money moving out of the share market and into bonds gonna be at least 5 trillion so all havens will see rising currencies?

[Wombat + 1,028]

6 minutes ago, 0R0 said:

For which products

Both oil and LNG.

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8 hours ago, BenFranklin'sSpectacles said:

Fair point.  I agree that local spot prices could reach exorbitant levels. 

Would global spot prices do the same though?  This seems like an oddly specific scenario where a limited number of people are affected.  E.g. if GB isn't importing LNG due to weather, there's more LNG available elsewhere.  Would the world, on average, end up paying more?

Well, natural gas will always tend to susceptible to price shocks in local areas because of logistics (due to constrained supply/demand). This will be true till there is sufficient LNG infrastructure everywhere to make spreads more diffuse like crude.

One other thing that I think will put a price ceiling on oil is more readily available cheap natural gas, especially as the petrochemical industry increasingly uses ethane as a primary feedstock rather than naptha (or olefins derived from coal or biomass). That will be more economical with more mature LNG infrastructure availability.

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8 hours ago, BenFranklin'sSpectacles said:

Fair point.  I agree that local spot prices could reach exorbitant levels. 

Would global spot prices do the same though?  This seems like an oddly specific scenario where a limited number of people are affected.  E.g. if GB isn't importing LNG due to weather, there's more LNG available elsewhere.  Would the world, on average, end up paying more?

The same situation occurred in CA 15+ years ago when they left only Orange county on merchant power rates. When a heat wave came through, production didn't match demand and prices for the market price zone bore the weight of the entire state's demand. Orange Country came to a halt. 

@Geoff Guenther is absolutely right about what happens when you shut down your options. Your supply network becomes brittle and prices of necessary peaking resources go through the roof and shut you down. If planning ahead with "unrealistically" high storage does not happen, then the system can go through complete breakdown financially within less than one week of a high demand low reneables period. 

Sharp peaks in oil take years to result in large scale added production. Shale can only respond rapidly so long as the run rate continues at least at a minimal scale. Even so, it is still most of a year forward response delay. 

Note that the "elsewhere" was also engulfed in the polar vortex, as the bulk of Western Europe's population is within 200 miles of Brussels. All the geographically realistic alternative ports would be in a similar state. Besides which, What do Britons care what happens outside their country when the are paying 300 quid for 3 pound NG? 

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13 minutes ago, Wombat said:

Both oil and LNG.

That isn't what is of concern. The prize is being the low cost producer of their products. Starting with resins and agrichems and on to parts, especially 3D printed complex ones. Besides, LNG will continue to grow as the peaking fuel because as @Geoff Guentherpoints out, there is no alternative without taking an enormous risk with the survival of your people and your finances. 

The US is already back to producing 40% of plastics, if China is cutoff then their subsidized plants will be displaced by the US production. Chinese parts makers are already complaining that resins cost more in China than in the US and threaten to leave. The US industry is waiting to see what happens as they don't want to expand beyond their known market before they see China letting go of their part in the supply chain. Covid 19 may make their decision for them.  

[BenFranklin'sSpectacles + 762]

13 hours ago, 0R0 said:

 

There is a huge difference between producing 1% of the world's new autos as EVs and approaching near 100% in the compressed transition. One is a trickle, the other is a torrent.

Mining companies are indeed trying their best to reduce their carbon footprint and costs. The electrification of mines is due to the need to remove exhaust gasses downhole. The second issue is the great torque you can get with a Neodymium motor, or using a field coil motor (consumes far more electricity but can run higher torque). The renewables are indeed coming in where possible. Where possible is very narrow, Nevada mining districts sure, Grassburg mine, not really possible for a 100% transition quite yet, as it is in the tropics and you don't get that many sunny days in a row. Mines in the North have little solar conversion potential and are not generally where the wind corridors are, not that it stops managements from trying. 

The cannibalizing of existing auto plant for EV and renewables production is a marginal issue. The bulk of the cost and energy demand is new tooling for the drive trains and battery compartments. They can't really close the redundant motor factories till the throughput of the EVs is actually there to replace it. It isn't even on the drawing board yet. What is, amounts to 4-5% of auto production 2-4 years from now. The big deal is trucks. They are not yet on the road. So no electrical trucks will be involved in the renewables transition till it is 1/3 through. 

The renewables and EV transition is purely additive activity at the ramp up. Thus no savings will be had till there is substantial output in the sector. The fact that you are taking orders for the electric truck line of 2025, does not mean that in the interim there would be fewer diesel truck sales. At this point, even Tesla doesn't have a working prototype out of the lab. Just a spec sheet and designs and non-production prototyping for parts and assemblies. 

Renewables require enormous transmission lines as demand centers for electricity are not located where the renewables can be produced economically. I am assuming that the long distance transmission will be aluminum. But the quantities involved are enormous as the mileage being spanned is not large scale, but enormous. Where you need the copper is in the distribution, EVs and point of use since aluminum connections are unsafe and difficult to use at the small scale. 

Decarbonization of mining has potential for 40-53% reduction of carbon. But the trucks are still diesel as the energy density of batteries is not yet in the ballpark of what they need to carry onboard for a days' work.  

https://rmi.org/sunshine-for-mines-a-brighter-vision-for-sustainable-resources/

https://www.festanks.com.au/blog/renewable-energy-mining/

Diesel will stay in the mine till we have reliable hydrogen motors and high density storage (e.g. adsorbed H2) is workable. If you use electric mining trucks then their batteries are going to be bigger than their hauling chamber and would contribute to a 30-40% increase in weight. 

The renewables volume requirements for key metals/elements at full bore run rates is a 10 fold increase from 2019 levels. 5 fold for a 20 year transition. There is a problem that of the marginal new mining projects, China owns a controlling equity stake in 60% and has no intention of letting anyone other than itself have access to these materials. It is the same policy it took towards Cesium, where Chinese companies (SOE and related) bought all 3 major mines and their inventory. (Cs is necessary for drilling, precision electronic clocks, and much more) the Chinese owned miners only sell to China and you can only produce the products using it in China. Minor producers are not capable of filling the gap yet. Thus for the West, any acceleration of the rate of renewables adoption requires NEW mines that are not Chinese owned. 

The notion of displacement and cannibalization of resources into renewables can only happen by a substantial outbidding of existing users. Meaning that it can only happen if you are willing to spend as much as 4 times as much in order to accelerate the transition to 1 decade. 

The proportions are not linear. Mining of the key materials other than Al and Li requires that you go down the ore grade hierarchy to low grade mines, where the concentrations are 10% or worse than in the best resources that are currently being mined and in many of which, Chinese state sponsored companies own equity control in Africa and S. America. IT DOES NOT SCALE LINEARLY. It is an exponential price to throughput relationship. 

The minuscule amounts of key rare elements are mined from say 500-1000 ppm resources now. Increased throughput  requires that you mine 100-200 ppm resources (or worse) - meaning that you are moving 5 times more rock to get the same marginal output. Some of the key metals are at <100 ppm concentrations, even single digits or are produced from byproduct of other metals so don't have their own dedicated mining capacity at all. 

Right now we have a lithium glut due to over-investment. That is one of the main reasons battery storage costs so much less than it did just 10 years ago. That is when EVs and electric storage are just 1-2% scale relative to autos and FF electricity. When you go beyond that existing throughput capacity you need to build new mines, so no glut pricing, but full price is in your future including a coverage of profit and capital costs.  

Yes, the EV and renewables investment is happening in parallel. No problem at 1-2% of global auto production and electrical production per year. It is a problem as you scale up demand for inputs and thus the investment in mining them. Again, you are drawing a less than straight line assuming efficiencies of scale while ignoring the inefficiencies of impatient demand. Hiking the displacement rate from the "natural" transition of 20 years ramping slowly to finish at a 9-10% rate, to 10 years means you have to ramp to >10% replacement rate within a year or two. Meaning that you need to immediately have production from low grade ores at a throughput that is far greater than existing capacity.

Your analysis is typical academic wishful thinking. Do some engineering analysis. The tiny amounts of key rare minerals translate into moving enormous amounts of rock. Which is only possible with diesel powered trucks and moving equipment. The faster you want the product, the more expensive it is to produce, the relationship is between exponential and a power ratio. Nothing is linear in this world of minerals. This is not iron ore bauxite and coal. Rare means 10 to 100 fold smaller ore concentrations and many of them far worse. Those for CdTe  thin film solar which leads in commercial solar conversion efficiency. They are already responsible for consuming 50% of Te, which is a byproduct of copper mining. Its price in the prior spike went  from $10-20 pre 2005 to $200s at peak 2011. Having yet no alternative source, Firstsolar bought a "high grade" gold tellurium mine Teloro with a once in a lifetime ore grade averaging 2500 ppm Te. There are no others like it. The ore sample grades 100-20000 ppm. 

https://www.greentechmedia.com/articles/read/first-solar-owns-a-tellurium-mine

 So if you want to get the mine fully developed, you need to raise the price to cover all the costs a rapid production ramp up would require going forward. Otherwise, you just hope that copper miners and metal refiners will manage to produce your Te requirement. That would get you back to $200/lb or worse and the project economics would likely fail as that would be a 50%-100% cost increase in your thin film solar panels. Not that of the current 470 tonne production China refines 290 tonnes, which is what dropped prices 5 years ago. 

Competing solar minerals are copper Iridium gallium selenide is the other non silicon thin film. 

Note that iridium is a critical metal for processing lithium (crucibles). It finished 2019 at $1500/ozup from $544 in 2015. It is a byporduct of Palladium and Platinum - the combustion catalysts for gasoline and diesel, respectively. and from refining of copper and nickel. There are no sufficiently iridium rich deposits that can be developed on their own, the supply is dependent on demand for the other metals, at least for now. If Iridium crosses $3k/oz then perhaps a couple of low grade PGM mines with relatively high iridium might make it to production. Typical single digit PPM concentrations in commercial ores. 

 

I think the scale up you are imagining is illusory. The world would have to be put upside down to make it happen, the required associated consumption of energy - namely diesel, would not make you happy and would easily drive oil prices (Brent) up to recession inducing levels. 

WITHOUT accelerating the timetables, the future you seek would happen, but only in 2030 would you start having enough EVs and renewables to actually displace the resource consumption required to put more of them in place without increasing other resources. Till then their implementation is entirely ADDITIVE to general resource demand. 

 

12 hours ago, 0R0 said:

There is a general demand decline due to demographics in OECD+China. The US portion is set to rebound out of the downtrend to an uptrend as Millennials go up the income ladder. Everyone else in the Industrialized world and newly industrialized China is experiencing a declining active age population and fewer children every consecutive year. That is one of the major inhibitors of Europe's growth and without export growth to China and its commodity supplier economies and the US, the EU would not have recovered from recession at all after the crisis. Germany would have looked just like Italy and Span. Only France has a decently balanced demographic. 

China has been the driver of energy consumption growth directly or through its commodity supply chain. US and Europe had peaked in 2007-8 and earlier for some EU countries - as early as 2000. 

The EV and hybrids have only had a marginal effect.

 

 

9 hours ago, 0R0 said:

First, non-REE motors are about 50% as efficient, so would require double the battery capacity to have the same range. 

it is not "a certain" amount of material. It is 5 to 10 fold the material in order to produce a 2 fold jump in throughput. The millions of EVs and and PHEVs are mostly in China. Notably NONE of the trucks scurrying about installing the renewables, mining their rare material inputs or exploring for them are EVs of any sort. At least not yet. 

 

9 hours ago, 0R0 said:

EVs and PHEVs are not used in mining yet, and likely will never be till a non-Li battery is available with way better energy density than diesel. LNG, less so CNG can be used instead of diesel with a not too great fuel storage size and weight penalty for big earth movers on the mine. The problem is that managements don't like LNG from a carbon footprint perspective though it reduces carbon by 30-40%. They do very much like the cost savings.

They would love it much more if they could use renewables to charge up their mining equipment and earth movers and mega trucks without having to lug around batteries larger and more costly than the vehicles/equipment. 

I'm out of time, so I can't go through this in detail, but I will point out what I perceive to be serious flaws:
1)  You're still conflating "energy" and "oil".  They're not the same thing.
2)  You still haven't put the 5-10X increase in material moved for REEs into context.  What percentage of world oil demand is mining?  What percentage of mining oil demand are REEs?  If REE mining diesel consumption increased 10X, would that be enough to offset the ongoing electrification of vehicles?  Your claim sounds terrible until we realize how small a fraction of oil demand we're talking about.
3)  When discussing oil demand destruction, whether that destruction comes from ore trucks, local delivery vehicles, or my car is irrelevant.  It's all demand destruction.
4)  You continue to hang arguments on specific technologies, such as pure BEVs, when additional options exist.  The transition will include all options - not just the ones you chose to model. 
5)  You're wrong on the details of how the conversion will be implemented.  E.g. automotive companies are constantly designing new vehicles and retooling factories.  The transition to EVs will involve designing/retooling for fewer ICEs and more hybrids, PHEVs, and BEVs.  E.g. instead of building two product lines for a particular ICE model, they might do one, converting the other to EV.  Net additional oil consumption: zero.  I.e. in practice, industry behavior happens at a much finer level of detail than you're able to model. 

I'll stop there.  Your argument boils down to this:
"If we commit to transitioning in 10 years, refuse to learn anything from the process, refuse to adjust our behavior as we go, and refuse to use all the options available, then a worst-case analysis suggests oil demand will spike.
That never happens in practice. 

I've seen this type of simplistic analysis before:  the Malthusian Catastrophe.  Also, every IEA oil demand prediction ever published.  Your prediction, like theirs, can tell us that we should turn our attention to a problem - but it can't tell us what is or is not possible. 

The irony of this is that you claim I'm exercising academic wishful thinking when it's you who believe you can predict the future.  I'm merely saying markets always have been and always will be more dynamic than humans are capable of modeling. 

You have a powerful incentive to maintain your position, which means nothing I say will convince you, so let's do this:  $20 says you're wrong. 

[Tom Kirkman + 8,860]

9 minutes ago, BenFranklin'sSpectacles said:

I'm merely saying markets always have been and always will be more dynamic than humans are capable of modeling. 

^ excellent point

[surrept33 + 609]

19 hours ago, Ward Smith said:

Rare earth's are exactly that, rare. China is the world's largest supplier not because bigger quantities exist in China, but because China is perfectly willing to decimate hundreds of sqare miles (maybe thousands by now), effectively strip mining for elements like neodymium that occur in the milligrams per ton scale. Those are required for the high efficiency brushless DC motors that make EV's practical. BTW Tesla doesn't do their motors with BLDC and that's stupid of them, requiring multiple steps of AC to DC conversing and back. Smarter to keep it all DC after it's in the batteries no?

 

But isn't a good case study in the most commercial successful EV company (Tesla) not using any rare earths for their motors (i.e, Neodymium and friends), presumably because of cost/supply chain risk? I can't say I am qualified to understand the technical details of why this might be a bad tradeoff but presumably from a commercialization standpoint, this helps them avoid supply chain issues in their critical path to scale.

Based on my understanding, only a small percentage of wind turbine manufacturers (those who make direct drive turbines) and PV manufacturers (those who make thin film CdTe panels) are super reliant (or can/have adapted to use smaller amounts) on rare earths, and that's a tiny portion of the overall market. 

 

[Ward Smith + 6,615]

17 hours ago, BenFranklin'sSpectacles said:

Get paid to argue with people?  Sure!  That's my dream job. 

Monty Python has a position for you

[0R0 + 6,251]

4 hours ago, BenFranklin'sSpectacles said:

 

 

 

I'm out of time, so I can't go through this in detail, but I will point out what I perceive to be serious flaws:
1)  You're still conflating "energy" and "oil".  They're not the same thing.
2)  You still haven't put the 5-10X increase in material moved for REEs into context.  What percentage of world oil demand is mining?  What percentage of mining oil demand are REEs?  If REE mining diesel consumption increased 10X, would that be enough to offset the ongoing electrification of vehicles?  Your claim sounds terrible until we realize how small a fraction of oil demand we're talking about.
3)  When discussing oil demand destruction, whether that destruction comes from ore trucks, local delivery vehicles, or my car is irrelevant.  It's all demand destruction.
4)  You continue to hang arguments on specific technologies, such as pure BEVs, when additional options exist.  The transition will include all options - not just the ones you chose to model. 
5)  You're wrong on the details of how the conversion will be implemented.  E.g. automotive companies are constantly designing new vehicles and retooling factories.  The transition to EVs will involve designing/retooling for fewer ICEs and more hybrids, PHEVs, and BEVs.  E.g. instead of building two product lines for a particular ICE model, they might do one, converting the other to EV.  Net additional oil consumption: zero.  I.e. in practice, industry behavior happens at a much finer level of detail than you're able to model. 

I'll stop there.  Your argument boils down to this:
"If we commit to transitioning in 10 years, refuse to learn anything from the process, refuse to adjust our behavior as we go, and refuse to use all the options available, then a worst-case analysis suggests oil demand will spike.
That never happens in practice. 

I've seen this type of simplistic analysis before:  the Malthusian Catastrophe.  Also, every IEA oil demand prediction ever published.  Your prediction, like theirs, can tell us that we should turn our attention to a problem - but it can't tell us what is or is not possible. 

The irony of this is that you claim I'm exercising academic wishful thinking when it's you who believe you can predict the future.  I'm merely saying markets always have been and always will be more dynamic than humans are capable of modeling. 

You have a powerful incentive to maintain your position, which means nothing I say will convince you, so let's do this:  $20 says you're wrong. 

I don't have an incentive. I reason through the process with what I do know and look at the projections from an engineering point of view. I go and look at conditions in the various segments related to known technology. I can't model unknown technology, just to predict that efficiencies are incurred over time. 

It is not difficult to go and check out the components of the supply chain that does exist and do a cursory analysis of how it scales. You can rest assured that the world will get scoured for minerals again and some new deposits will be found. But in the case of copper and energy materials, this would be a second time round so new finds will be fewer and most likely would be of lower quality and thus proportionally more expensive to produce and consume larger amounts of diesel. I can go and scale mining's share of energy consumption, and consider how far renewables will go to displace diesel. Since there had been an effort to do so in the mining industry for a long time, it is fairly easy to see where the process is getting stuck. Diesel presumably can be displaced by LNG for heavy equipment with only a minor weight penalty. But the transition takes time. 

Mine diesel consumption is scaled to the number of haul trucks (150 ton) for open surface mining as the excavator and other equipment that can't be electrified go. About 1 mil liters of diesel/yr per truck.  or 6500 oil Bbl/yr per truck, about 2/3 of the trucks are used to remove overburden to reach the ore at the start of mining operations, the tail end of the mine life uses 1/3 as many trucks. 5:1 overburden to ore is a "good" case, 10:1 is still considered good enough. The tonnage haul is scaled to the ore quality e.g. 3 PPM for a nice gold or PGM mine (that average includes ore grades from 1/4 of the average - the cutoff - upwards). About 2 mil tonnes/yr per truck. 6000 hauled tonnes per kg/(ppm concentration) or 22 BBl/kg/(ppm concentration).

Neodymium in existing known resource ore bodies are 28 ppm, for example. So you should expect 22/28 ~0.8 Bbl/kg.

For Tellurium you have 1.1 ppm so about 20 Bbl/kg if anyone bothered to do it, the one redeeming quality of Te is that it is a byproduct of copper refining. The FirstSolar mine and its neighbor Bambolla are 2500 ppm, but the normal leach extraction process is not applicable to it as it loses ALL of the Te in the ore. I don't know if they solved the problem for that. 

All of this is for rough estimates. 

A decent discussion is provided in this somewhat dated USGS report chapter for Tellurium. 

https://pubs.usgs.gov/pp/1802/r/pp1802r.pdf

Downhole mining can be electrified entirely but for the haulage at top hole. 

The compressed timescale you propose for transition does not allow for the time necessary to transition at the ground level, The industries can not apply equipment from the development stage for current production and expansion. Those new more renewable or cheaper to operate parts of the minescape will only be there 3-5 years ahead, by which time the compressed schedule requires you to be far ahead in scale of throughput, meaning that the new technologies will be excluded from the scale up phase of the process. Eliminate your politically driven time constraint and you have everything you are predicting. 

In many mining districts in Africa and S. America and SE Asia, the diesel tanker trucks are routinely stolen or hijacked, so anything that saves on diesel is pure bliss to miners. Whatever else they do, reducing diesel use is top of mind. Hopefully, LNG pods on trucks would be a less enticing target for the thieves. 

Only new high grade discoveries will improve prospects, otherwise, incremental production is from LOWER GRADE ORES, and the more you need, the lower the grade you will have to mine. Typically, doubling the volume takes you down to 1/4 in ore grade (ppm concentration) relative to current average so quadruples the diesel demand. 

Mining of energy metals, other than copper is not quantified separately anywhere. You can go by production and ore grade by metal (see BP report below) and get a rough estimate. At the moment it is probably on the order of 1-2% if you include copper and PGMs. Practically all the non-REE energy materials are byproducts obtained by refining of copper gold nickel, Platinum and Palladium. So they have no metric of their own. 

However, if you are talking about forcing consumption rates up then you are talking about producing a copper glut, a gold glut and a PGM glut and $200 Te, $3000 Ir etc. and the industries using lower grade ores. Since you are increasing demand by a factor of 10 from current levels, then expect a 50 fold increase in ore and overburden volumes (I am giving you a 50% discount) and you have 20-30% potential increase in oil demand. It could be much less, and it could be much more. I don't have the time to do the data gathering of individual projects - not that it is available for most projects, as the 60% that is related to China owned strategic minerals don't provide any information at all. 

 

You might find this useful

https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2019-full-report.pdf

[0R0 + 6,251]

6 hours ago, surrept33 said:

 

But isn't a good case study in the most commercial successful EV company (Tesla) not using any rare earths for their motors (i.e, Neodymium and friends), presumably because of cost/supply chain risk? I can't say I am qualified to understand the technical details of why this might be a bad tradeoff but presumably from a commercialization standpoint, this helps them avoid supply chain issues in their critical path to scale.

Based on my understanding, only a small percentage of wind turbine manufacturers (those who make direct drive turbines) and PV manufacturers (those who make thin film CdTe panels) are super reliant (or can/have adapted to use smaller amounts) on rare earths, and that's a tiny portion of the overall market. 

 

Tesla use Neodymium motors for their main products by volume. The classic Roadster uses a Tesla (the inventor genius not the company) induction motor that uses Nickel rich Ferrite laminates. That does not use any Neo. They can convert their entire production to induction motors if batteries can be made cheaper since the induction motors consume 30 to 50% more electricity. 

The only competitive silicone PV is from China, the rest is FirstSolar Cd/Te and and competitors using the gallium etc. thin film. It is an issue of Silicone PV being energy and labor intensive. FirstSolar has consecutively reduced the amount of the active PV metals on its film without loss of conversion efficiency. Don't know if there is any more potential for further reduction of substance. 

It isn't a small portion of the overall market in the US. It is small in most of the world where the costs of maintenance and failures are less important because of lower labor costs, so they can afford to use standard grade Chinese silicone PV. 

[Wombat + 1,028]

On 2/29/2020 at 2:27 PM, 0R0 said:

That isn't what is of concern. The prize is being the low cost producer of their products. Starting with resins and agrichems and on to parts, especially 3D printed complex ones. Besides, LNG will continue to grow as the peaking fuel because as @Geoff Guentherpoints out, there is no alternative without taking an enormous risk with the survival of your people and your finances. 

The US is already back to producing 40% of plastics, if China is cutoff then their subsidized plants will be displaced by the US production. Chinese parts makers are already complaining that resins cost more in China than in the US and threaten to leave. The US industry is waiting to see what happens as they don't want to expand beyond their known market before they see China letting go of their part in the supply chain. Covid 19 may make their decision for them.  

I am not disputing the fact that US oil + gas is reasonably competitive, just saying there is insufficient demand to sell it at a profit. That spells trouble ahead for US economy.

[0R0 + 6,251]

7 minutes ago, Wombat said:

I am not disputing the fact that US oil + gas is reasonably competitive, just saying there is insufficient demand to sell it at a profit. That spells trouble ahead for US economy.

There is OPEC that can cut supplies to the point of a reasonable price for the industry that is not high enough to power another rush to drill more shale, just maintain output.~$55 I would guess. 

[Wombat + 1,028]

5 minutes ago, 0R0 said:

There is OPEC that can cut supplies to the point of a reasonable price for the industry that is not high enough to power another rush to drill more shale, just maintain output.~$55 I would guess. 

I disagree that US shale has major influence on price at this stage. Only 5% of global production. It is just that EVERYBODY rushed to produce more oil after the last crash. Iraq, Canada, Kurdistan and others each added nearly as much production as US. The world became over-supplied before the corona virus (hence the deep and long cuts by OPEC), and now things much worse and deteriorating each week.

[Wombat + 1,028]

2 minutes ago, Wombat said:

I disagree that US shale has major influence on price at this stage. Only 5% of global production. It is just that EVERYBODY rushed to produce more oil after the last crash. Iraq, Canada, Kurdistan and others each added nearly as much production as US. The world became over-supplied before the corona virus (hence the deep and long cuts by OPEC), and now things much worse and deteriorating each week.

PS: In a month's time, the whole world may be in lockdown.

[0R0 + 6,251]

19 minutes ago, Wombat said:

PS: In a month's time, the whole world may be in lockdown.

I don't believe it will happen as it did in China. US and EU workers are not crammed 8 to a room in dorms on the premises like Chinese production workers. About 160 mil of migrant workers live that way. Another 160 mil live in crowded apartments they (or rather their family) own or rent.

So that leaves just events and schools closing and restaurant dining going to delivery. Most office workers can work from home. Medical offices are the real problem. 

So long as there is no panic then most people can function just fine and most business can continue as they are with some precautions like constant sterilization of surfaces in common areas, rubber gloves and masks on the production line where contact with the product can't be avoided. Best practices were in Singapore. Best thing to do is follow their lead.

[Douglas Buckland + 6,308]

I do not think it is possible to quarantine a single city anywhere else on the planet except for North Korea. You have to have essentially a totalitarian government and a populace that actually believe ‘we are the government and we are here to help you.’

Westerners are too cynical and do not like government intrusion into their lives.

Can you honestly picture London, Paris or Denver in lockdown?

[Guillaume Albasini + 851]

39 minutes ago, Douglas Buckland said:

I do not think it is possible to quarantine a single city anywhere else on the planet except for North Korea. You have to have essentially a totalitarian government and a populace that actually believe ‘we are the government and we are here to help you.’

Westerners are too cynical and do not like government intrusion into their lives.

Can you honestly picture London, Paris or Denver in lockdown?

Could you honestly have pictured a 11 million city like Wuhan in lockdown three month ago ?

[Guillaume Albasini + 851]

On 2/29/2020 at 11:39 PM, 0R0 said:

The compressed timescale you propose for transition does not allow for the time necessary to transition at the ground level, The industries can not apply equipment from the development stage for current production and expansion. Those new more renewable or cheaper to operate parts of the minescape will only be there 3-5 years ahead, by which time the compressed schedule requires you to be far ahead in scale of throughput, meaning that the new technologies will be excluded from the scale up phase of the process. Eliminate your politically driven time constraint and you have everything you are predicting. 

In many mining districts in Africa and S. America and SE Asia, the diesel tanker trucks are routinely stolen or hijacked, so anything that saves on diesel is pure bliss to miners. Whatever else they do, reducing diesel use is top of mind. Hopefully, LNG pods on trucks would be a less enticing target for the thieves.

Some open mines are already operating LNG trucks. The transition from diesel to LNG truck will be quicker than expected. Mining companies are looking for every way to reduce costs  and using LNG instead of diesel allow huge savings (Caterpillar estimates the savings arount 20 to 40%). And no need to buy brand new trucks, you can retrofit existing trucks to allows engines to run on both diesel and LNG.

https://www.cat.com/en_GB/news/machine-press-releases/caterpillar-to-offer-dual-fuel-retrofit-kit-for-785c-mining-truck.html

Electric trucks and machines will be used mainly in underground mines. Reducing the use of diesel fuel could have significant cost benefits for the industry: as much as 40 percent of an underground mine’s energy outlay is spent on powering gigantic ventilation systems to remove pollutants from tunnels.

 

[Douglas Buckland + 6,308]

3 hours ago, Guillaume Albasini said:

Could you honestly have pictured a 11 million city like Wuhan in lockdown three month ago ?

Yes, it is in China so therefore possible.