Fuel prices world-wide

[Robert.Boston]

A colleague asked whether, if EVs really took off, they could affect natural gas or gasoline prices. Here was my analysis:

In the U.S., the average passenger vehicle is driven about 12,500/year. At about 300W/mile for an EV, that’s 3.75MWh/vehicle-year, generated using 30 MMBtu/year of gas (at, say, an 8000 heat rate, and assuming that every vehicle charges exclusively with gas).

Suppose the President’s vision of 1,000,000 EVs comes to pass. That’s 30 Bcf of gas annually to charge = 2.5 Bcf/month. U.S. production is running at about 2,000 Bcf/month.

So, with a 0.125% increase in NG demand, EVs are not going to be much of an influence in moving natural gas prices towards the world average.

These same cars, if they replaced automobiles with a fleet average mileage (21.5mpg) would displace 13.8 million barrels of gasoline annually, or 38,000 barrels/day. The U.S. refines about 18.2 million barrels/day of gasoline, so the EV savings is only 0.4% of the total. This is still very small, but still about 3x greater percentage impact.

 

[vfx]

...So, with a 0.125% increase in NG demand, EVs are not going to be much of an influence in moving natural gas prices towards the world average.... The U.S. refines about 18.2 million barrels/day of gasoline, so the EV savings is only 0.4% of the total. This is still very small, but still about 3x greater percentage impact.

Interesting that similarly, electricity used to drive an EV is 3 to 5 times cheaper than gasoline.

 

[zack]

I can fully recharge my Roadster for about $7 in Minnesota, conservatively. (After all taxes my electric bill ends up at $0.12 per kWh.) Filling a 16 gallon Porsche 911 at $4/gal will cost $64, which is 9 times as much, and the range at the EPA rated 16 mpg (city) will be 256 miles. 8^D

 

[bolosky]

The funny thing is that I didn't even realize that gas prices have gone up.

I just stopped looking at them when I got the Roadster. It's true that I do have a Pathfinder that I have to fill up every few months, but it just doesn't matter that much.

 

[SByer]

I keep having to resist the urge to cheer.

 

[Tommy]

Interesting that similarly, electricity used to drive an EV is 3 to 5 times cheaper than gasoline.

vfx, where I live using electricity to drive is cheaper because of the efficiency of the EV is so much greater than an ICE not because electricity is cheaper than gasoline. Case in point, my lowest electrical rate is about 15 cents a kWh; there are about 33.5 kWh in a gallon of gasoline, so on an energy equivalent basis my cost for a "gallon" of electricity is about $5 dollars (15 x 33.5).

Not disputing what you said, just expanding on your point that even in an area where electricity is on par or more expensive than gasoline, owning an EV one still comes out ahead on fuel costs.

 

[Todd Burch]

I keep having to resist the urge to cheer.

Me too. My wife tells me to keep it to myself so I don't get mugged.

 

[Norbert]

vfx, where I live using electricity to drive is cheaper because of the efficiency of the EV is so much greater than an ICE not because electricity is cheaper than gasoline. Case in point, my lowest electrical rate is about 15 cents a kWh; there are about 33.5 kWh in a gallon of gasoline, so on an energy equivalent basis my cost for a "gallon" of electricity is about $5 dollars (15 x 33.5).

Not disputing what you said, just expanding on your point that even in an area where electricity is on par or more expensive than gasoline, owning an EV one still comes out ahead on fuel costs.

Not sure what you are trying to say.... but makes me want to point out that an EV goes more than 100 miles with 33.5 kWh, whereas the average ICE on the road only gets 20 miles out of one gallon.

 

[Tommy]

Not sure what you are trying to say.... but makes me want to point out that an EV goes more than 100 miles with 33.5 kWh, whereas the average ICE on the road only gets 20 miles out of one gallon.

That was EXACTLY my point. I don't always put in words my entire line of reasoning; perhaps being lazy on my part. To my point: I state "the efficiency of the EV is so much greater than an ICE..." While I did not give the specifics of the efficiency, I had hoped that line would inform the reader enough to draw the proper conclusions. Sorry I wasn't clear.

 

[roblab]

Not sure what you are trying to say.... but makes me want to point out that an EV goes more than 100 miles with 33.5 kWh, whereas the average ICE on the road only gets 20 miles out of one gallon.

That's odd. I have heard anywhere from 27 kWh to, today looking at Wiki, 36.6 kWh per gallon of gasoline. How would one actually know? And are they using different gallons, or blends? I know diesel is more energy dense. I don't get it.

 

[EVNow]

I think this time is different. We will not go back to step 1 .

High price of oil will create a demand for electric vehicles, stimulating consumption, lowering US trade deficit and creating lots and lots of jobs.

EVs are just noise in the larger scheme. The maximum EV production capacity is too low to make a difference - even if large # of people want to buy. Ofcourse, by the time the industry reacts to increase capacity we would have moved to the next step of falling gas prices - that reduces EV demand.

This is the reason I prefer to have floor of gas prices. This creates a predictable environment that helps investment decisions.

What will happen is higher demand for Prius & other high mpg cars. In Feb - for the first time (IIRC) - Prius came in at #12. Better than Chevy Cruze. That was a 57% increase year-over-year.

 

[dpeilow]

BBC News - Petrol price hits record high

BBC News - School run supercars

 

[Steph]

EVs are just noise in the larger scheme. The maximum EV production capacity is too low to make a difference - even if large # of people want to buy. Ofcourse, by the time the industry reacts to increase capacity we would have moved to the next step of falling gas prices - that reduces EV demand.

This is the reason I prefer to have floor of gas prices. This creates a predictable environment that helps investment decisions.

What will happen is higher demand for Prius & other high mpg cars. In Feb - for the first time (IIRC) - Prius came in at #12. Better than Chevy Cruze. That was a 57% increase year-over-year.

When alternatives become cheaper, things can go very quickly.

A good example of that behavior is the "rare earth" crisis. When price of the rare earth metals went to the moon, most electric motor manufacturers changed their product to use less or no rare earth metal at all. The change was very fast and rare earth price are back to earth. But the change will be permanent.

Same thing will happens with EVs. When price of oil becomes the talk of the town, people will also move the conversation to alternatives, then act on it.

 

[Norbert]

That's odd. I have heard anywhere from 27 kWh to, today looking at Wiki, 36.6 kWh per gallon of gasoline. How would one actually know? And are they using different gallons, or blends? I know diesel is more energy dense. I don't get it.

The number used most is 33.7 kWh which EPA states is the equivalent for 1 gallon of gasoline. Not sure about the differences, and so far couldn't find where the Wiki number of 36.6 comes from.

 

[Norbert]

That was EXACTLY my point. I don't always put in words my entire line of reasoning; perhaps being lazy on my part. To my point: I state "the efficiency of the EV is so much greater than an ICE..." While I did not give the specifics of the efficiency, I had hoped that line would inform the reader enough to draw the proper conclusions. Sorry I wasn't clear.

Ah, yes, per energy equivalent the prices are in the same range roughly. (vfx probably knows that.) However the inefficiency in producing electricity means that the fossil resources used, are cheaper than gasoline (on average). But then, the difference to crude oil is smaller.

 

[dpeilow]

Diesel prices predicted to reach 150p as petrol hits new record | Money | guardian.co.uk

 

[Robert.Boston]

Next time you hear someone say, "the way to bring gasoline prices down in the U.S. is for us to drill more!", show them this chart, lifted from testimony given yesterday (Mar 8,2012) by Michael Conathan before a House subcommittee:

 

[Lloyd]

This graph shows me a relatively stable price despite increasing demand over the same period. The only way to lower the price of gas is to decrease the use and demand world wide.

 

[ElSupreme]

This graph shows me a relatively stable price despite increasing demand over the same period. The only way to lower the price of gas is to decrease the use and demand world wide.

Just under $2.00 a gallon in 2008, to just under $4.00 a gallon is roughly a 85% increase (and it was over a 100% increase for a while). I would hardly call that stable. And I know number of rigs has no indication on production volume, but 400 rigs to 1,200 rigs over the same period means more production.

I realize that increasing demand is what is driving the cost up. But this is pretty evident that increased production /= lower cost gasoline. But to say a price that increased 100% over a couple year period stable? It is a stretch. Hell I filled up for 89¢ a gallon in 2000.

 

[Lloyd]

Look more closely at the graph. It starts at 2.60 and ends at 3.70 with extensions above and below. Over that time frame factor in the decrease in the value of the dollar, add some inflation, and you have a stable price. There was some Government manipulation also. In 2007 if I remember correctly we were replenishing the Strategic Oil Reserve which contributed to some of the increase. My point is that it is that other factors have a bigger effect than the price of the fuel relative to other commodities.

This graph did not show production, just rigs operating. Rigs over time have lower production and more operating /= more production!