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This Is How Big Oil Will Die


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#1 diogenes227

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Posted 05 August 2017 - 04:18 PM

A true must-read.  Particularly for long-term oil-industry investors. 

 

Hard to fathom in a current times, but who would have believed coal would fall of a cliff and die in no time flat.  Oil and pipeline face the same fate - the same cliff awaits...

 

But over and done and mostly gone by 2025?  Who would believe the future will rush into the face of big oil as fast as coal?

 

Succinct, logical, rather obvious in the end.

 

THIS IS HOW BIG OIL WILL DIE

 

From the link:

 

 

The Keystone XL will go down as the world’s last great fossil fuels infrastructure project. TransCanada, the pipeline’s operator, charged about $10 per barrel for the transportation services, which means the pipeline extension earned about $5 million per day, or $1.8 billion per year. But after shutting down less than four years into its expected 40 year operational life, it never paid back its costs.

 

The Keystone XL closed thanks to a confluence of technologies that came together faster than anyone in the oil and gas industry had ever seen. It’s hard to blame them — the transformation of the transportation sector over the last several years has been the biggest, fastest change in the history of human civilization, causing the bankruptcy of blue chip companies like Exxon Mobil and General Motors, and directly impacting over $10 trillion in economic output.

 

And blame for it can be traced to a beguilingly simple, yet fatal problem: the internal combustion engine has too many moving parts.

Edited by diogenes227, 05 August 2017 - 04:21 PM.

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#2 risk_management

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Posted 05 August 2017 - 05:57 PM

Very interesting article and comment section is just as good. Thank you for posting this.

#3 Bernie

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Posted 05 August 2017 - 09:32 PM

http://www.api.org/~...-Study-2017.pdf

 

1) Rapid infrastructure development is likely to continue for a prolonged period of time. The primary drivers for robust development are still in place – shale and tight resource development is likely to continue in earnest, and markets will grow in response to the relatively low commodity prices that are being fostered by new oil and gas supplies. 2) Total capital expenditures (CAPEX) for oil and gas infrastructure development will range from $1.06 to $1.34 trillion from 2017 through 2035 (Exhibit ES-1). These levels of investment equate to an average annual CAPEX ranging from $56 to $71 billion throughout the projection (Exhibit ES-2). This includes investments in new as well as existing infrastructure for the following categories: a) Surface and Lease Equipment; B) Gathering and Processing Facilities; c) Oil, Gas, and NGL Pipelines; d) Oil and Gas Storage Facilities; e) Refineries and Oil Products Pipelines; and f) Export Terminals.


Edited by Bernie, 05 August 2017 - 09:34 PM.


#4 Bernie

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Posted 05 August 2017 - 09:42 PM

Always been a boom and bust. I think a lot of boomers like me are realizing. These hybrids are not worth the lost of comfort and cost of battery replacement. Engine assist technology is terrible if your getting into a vehicle in the texas hot sun and you want a/c now. Owned mine for 2 years going to trade it in on a regular sedan.

Berne



#5 kssmibotm

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Posted 05 August 2017 - 09:59 PM

There is one major flaw in this article.  It seems to assume that gasoline is the only product that comes from crude oil.  A barrel of crude oil can make about 19 US gallons of gasoline, 10 gallons of diesel, 4 gallons of jet fuel and another 9 gallons of other oil products such as liquid petroleum gas, plastics, lubricants or heating oil.  Electric cars will only impact about 45% of the products that come from crude.  Also, the article does not consider that refinery production can be adjusted to make less gasoline and more of the other products.  Don't count out crude oil just yet... demand will extend far beyond 2025.  



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#6 Douglas

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Posted 06 August 2017 - 02:07 AM

As a contrarian, wide-eyed articles like this making fantastic claims are more likely a tell tale sign of the beginning of a bottom in crude prices than its early demise.

 

Regards,

Douglas



#7 arbman

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Posted 06 August 2017 - 09:35 AM

As a contrarian, wide-eyed articles like this making fantastic claims are more likely a tell tale sign of the beginning of a bottom in crude prices than its early demise.
 
Regards,
Douglas


Not everything is contrarian, although oil probably has one more decade long wave higher, it's unlikely to ever go over $65-75 per barrel again. The competition from all other alternatives is becoming more and more cost efficient. We will replace everything that fossil fuels are providing today within 15 years.

While it's true that plastics and other uses of oil will remain, the demand for oil may never recover and actually even cheaper alternatives to crude oil may be found as we move toward biodegradable plastics and so on.

The transportation related oil use accounts about 60-65% of the oil refined.

#8 Data

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Posted 06 August 2017 - 09:45 AM

There is more supply of natural gas than conventional oil.   More electricity will be generated with natural gas.  Incorporating electric motors to assist combustion engines improves the fuel efficiency of the cars.  They are buying time as fossil fuels become more scarce and accessing them become more risky (see Iraq, Libya, Nigeria, Somalia, S. Sudan, etc.).



#9 Shaggies_View

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Posted 06 August 2017 - 11:44 AM

There is one major flaw in this article.  It seems to assume that gasoline is the only product that comes from crude oil.  A barrel of crude oil can make about 19 US gallons of gasoline, 10 gallons of diesel, 4 gallons of jet fuel and another 9 gallons of other oil products such as liquid petroleum gas, plastics, lubricants or heating oil.  Electric cars will only impact about 45% of the products that come from crude.  Also, the article does not consider that refinery production can be adjusted to make less gasoline and more of the other products.  Don't count out crude oil just yet... demand will extend far beyond 2025.  

Oil is dead. You can get all the products you just mentioned from 'gas' as well. Shell GTL operates the largest facility in Qatar. More importantly the products are higher quality and cleaner than from conventional oil.

 

Look it up http://www.shell.com.../pearl-gtl.html

 

Shaggy


Edited by Shaggies_View, 06 August 2017 - 11:45 AM.


#10 kssmibotm

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Posted 06 August 2017 - 05:18 PM

 

There is one major flaw in this article.  It seems to assume that gasoline is the only product that comes from crude oil.  A barrel of crude oil can make about 19 US gallons of gasoline, 10 gallons of diesel, 4 gallons of jet fuel and another 9 gallons of other oil products such as liquid petroleum gas, plastics, lubricants or heating oil.  Electric cars will only impact about 45% of the products that come from crude.  Also, the article does not consider that refinery production can be adjusted to make less gasoline and more of the other products.  Don't count out crude oil just yet... demand will extend far beyond 2025.  

Oil is dead. You can get all the products you just mentioned from 'gas' as well. Shell GTL operates the largest facility in Qatar. More importantly the products are higher quality and cleaner than from conventional oil.

 

 

 

The quality and cleanliness of the products has nothing to do with the source.  That is entirely dependent on the amount of refinement applied in the process.  GTL made sense when oil was $100, but is a higher cost process and cannot compete with oil at $50 per barrel for most products.  



People think the Holy Grail is something looked for but never found. In fact, it is something often found but rarely recognized.