You summarize that much better than I @petit_bateau . Further to your point in 24 months we'll be at the point where the numerous battery factories being built are producing enough EVs to remove a million a year, every year another million plus the million removed the year before. By 2030 (not that long from now) OPEC will be fighting for marketshare..not fighting for pricing. Frankly they are idiots, they should pump every barrel while they can at this price.
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Russia/Ukraine conflict
- Thread starter amolina
- Start date
SageBrush
REJECT Fascism
I've been following the Norway experience for a couple of years now, and noticed that the drop in oil consumption is a lot slower than I hoped/guessed. I think most of the explanation is that market growth from economic and population expansion has to be covered first.
There are about 1B passenger cars in the world, and about 0.35B commercial vehicles. If I start from 1% YOY fleet growth (is that reasonable ?) then oil consumption from passenger cars does not begin to drop until over 10M EVs are produced annually.
What Ukraine is up to in the south:
Thread by @TrentTelenko on Thread Reader App
They knocked out some Russian railway bridges that have put a massive strain on the already weak Russian supply chain. It also looks like they are going on the offensive to cut off all supply coming out of Crimea. Cut off the forces around Kherson and they will be in trouble very quickly.
And an analysis of the likely state of the Russian nuclear arsenal that dovetails with my thinking:
Thread by @TrentTelenko on Thread Reader App
Russia may have some working nuclear weapons, but a lot of their inventory is probably of limited value. The US spends $10 million a year on each of its 1000 nuclear warheads keeping them in working condition. The Russians have over 6000 and their entire defense budget is $40-$60 billion a year. Even if they are able to do maintenance cheaper than the US (which is likely) maintaining their entire nuclear arsenal to keep it all operational would consume most if not all their military budget.
I wasn't aware the US had given Ukraine M270s. That's going to make some bad days for Russian artillery.
Thread by @TrentTelenko on Thread Reader App
There has been evidence for close to 10 years that the Saudi oil has begun to run out. They may not be able to ramp up production and may just be fronting that they could.
Electric vehicles will reduce oil consumption, but we still don't have a good replacement for aircraft or long distance ship fuel and there are places where electrifying trains is not that viable. We will see a high percentage of new car sales as EVs by 2030, especially in countries that are pushing hard to move that direction, but the average age of a car in the US is 12 years old. That means half the US fleet is older than that and quite a high percentage of people driving those older cars can't afford anything newer.
Oil consumption will drop thanks to EVs coming along, but oil will still be used for many transportation purposes for decades more. As @petit_bateau pointed out, demand will drop naturally as the world goes into a recession due to high oil prices and ramping up various sources other than Russia will enable Europe to disconnect from Russian oil.
Thread by @TrentTelenko on Thread Reader App
They knocked out some Russian railway bridges that have put a massive strain on the already weak Russian supply chain. It also looks like they are going on the offensive to cut off all supply coming out of Crimea. Cut off the forces around Kherson and they will be in trouble very quickly.
And an analysis of the likely state of the Russian nuclear arsenal that dovetails with my thinking:
Thread by @TrentTelenko on Thread Reader App
Russia may have some working nuclear weapons, but a lot of their inventory is probably of limited value. The US spends $10 million a year on each of its 1000 nuclear warheads keeping them in working condition. The Russians have over 6000 and their entire defense budget is $40-$60 billion a year. Even if they are able to do maintenance cheaper than the US (which is likely) maintaining their entire nuclear arsenal to keep it all operational would consume most if not all their military budget.
I wasn't aware the US had given Ukraine M270s. That's going to make some bad days for Russian artillery.
Thread by @TrentTelenko on Thread Reader App
There has been evidence for close to 10 years that the Saudi oil has begun to run out. They may not be able to ramp up production and may just be fronting that they could.
Electric vehicles will reduce oil consumption, but we still don't have a good replacement for aircraft or long distance ship fuel and there are places where electrifying trains is not that viable. We will see a high percentage of new car sales as EVs by 2030, especially in countries that are pushing hard to move that direction, but the average age of a car in the US is 12 years old. That means half the US fleet is older than that and quite a high percentage of people driving those older cars can't afford anything newer.
Oil consumption will drop thanks to EVs coming along, but oil will still be used for many transportation purposes for decades more. As @petit_bateau pointed out, demand will drop naturally as the world goes into a recession due to high oil prices and ramping up various sources other than Russia will enable Europe to disconnect from Russian oil.
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petit_bateau
Active Member
A country that is not getting so much attention is Libya, and that is imho the best place to look for a decent additional volume of oil to enter the market. Given that the Wagner group are all being summoned home to fill body bags, and their bossman Putin has other things on his mind, perhaps the West could find itself pushing on an unlocked door in trying to get a resolution to the situation there. Perhaps Italy, France, and Turkey could make a joint effort, hard though that is to conceive given the history.
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Meanwhile the 1m bpd release from the US SPR is currently fuelling (literally) a 2m bpd export surge from USA, depleting wider US inventories. JohnKempReuters has a chartbook here
and he has pointed out that "On April 21, U.S. Treasury Secretary Janet Yellen warned of the counterproductive impact if a European import ban on Russian created a global oil shortage and forced prices up everywhere.", see
home.treasury.gov
It is worth reading her Q&A as well. The point is that the shale production ramp needs to yield material results 6-9 months from now.
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By the way a vehicle driving 12,000 miles per year at 30 mpg uses approximately 10 barrels of oil per year. Those are in fact typical global numbers that are reasonable for a calculation of this nature. Bear in mind that the world consumes approximately 100-million barrels of oil per day and you can see that the impact of BEV stocks increasing over the next couple of years are not going to be that material. A few years after that they do indeed become material, but not quite yet (there are all sorts of reasons Putin calculated that he had to make a move on Ukraine at this time, not later). Here are the sums if you want to inspect them:
By 2030 my central scenario has global BEV stocks at 40-million .......
===========
Meanwhile the 1m bpd release from the US SPR is currently fuelling (literally) a 2m bpd export surge from USA, depleting wider US inventories. JohnKempReuters has a chartbook here
and he has pointed out that "On April 21, U.S. Treasury Secretary Janet Yellen warned of the counterproductive impact if a European import ban on Russian created a global oil shortage and forced prices up everywhere.", see
Transcript of Press Conference from Secretary of the Treasury Janet L. Yellen as Part of 2022 IMF-World Bank Spring Meetings, G7 and G20 Finance Ministers and Central Bank Governors Meetings
As Prepared for Delivery Thank you for being here. This has been a very productive week and I’d like to thank the IMF and World Bank – as well as my counterparts in Germany and Indonesia at the G7 and G20 respectively – for their leadership this week. A significant amount of our focus this week...
It is worth reading her Q&A as well. The point is that the shale production ramp needs to yield material results 6-9 months from now.
============
By the way a vehicle driving 12,000 miles per year at 30 mpg uses approximately 10 barrels of oil per year. Those are in fact typical global numbers that are reasonable for a calculation of this nature. Bear in mind that the world consumes approximately 100-million barrels of oil per day and you can see that the impact of BEV stocks increasing over the next couple of years are not going to be that material. A few years after that they do indeed become material, but not quite yet (there are all sorts of reasons Putin calculated that he had to make a move on Ukraine at this time, not later). Here are the sums if you want to inspect them:
By 2030 my central scenario has global BEV stocks at 40-million .......
Attachments
RobStark
Well-Known Member
Ukraine-Russia war latest: Putin's party recruiting 'football hooligans' for private army; Russia and Ukraine swap hundreds of PoWs
Russia has used a "significant proportion" of its long-range missile stockpiles after days of heavy strikes in Ukraine - and has aimed at defence industry targets in a change from attacks last winter, according to British intelligence.
news.sky.com
Norway is a small country with few cars and lots of trucks and commercial vehicles, lots of resource management which means moving heavy things and shipping, ferries and coastal freighters etc. My calculations earlier in this thread is that we'd need to put about 10 million EVs on the road to remove a million barrels. In 2 years we should be doing this, that is global..not just the EU or US. By 2030 it will be several million barrels day. Norway is so small and with such an interesting geography I am not sure what we'll see until 4-6 years from now. The number of cars sold is miniscule so the impact is similarly small.
So something is rotten in the stats we have both been using. Just your spreadsheet has me thinking. ...A country that is not getting so much attention is Libya, and that is imho the best place to look for a decent additional volume of oil to enter the market. Given that the Wagner group are all being summoned home to fill body bags, and their bossman Putin has other things on his mind, perhaps the West could find itself pushing on an unlocked door in trying to get a resolution to the situation there. Perhaps Italy, France, and Turkey could make a joint effort, hard though that is to conceive given the history.
===========
Meanwhile the 1m bpd release from the US SPR is currently fuelling (literally) a 2m bpd export surge from USA, depleting wider US inventories. JohnKempReuters has a chartbook here
and he has pointed out that "On April 21, U.S. Treasury Secretary Janet Yellen warned of the counterproductive impact if a European import ban on Russian created a global oil shortage and forced prices up everywhere.", see
Transcript of Press Conference from Secretary of the Treasury Janet L. Yellen as Part of 2022 IMF-World Bank Spring Meetings, G7 and G20 Finance Ministers and Central Bank Governors Meetings
As Prepared for Delivery Thank you for being here. This has been a very productive week and I’d like to thank the IMF and World Bank – as well as my counterparts in Germany and Indonesia at the G7 and G20 respectively – for their leadership this week. A significant amount of our focus this week...
It is worth reading her Q&A as well. The point is that the shale production ramp needs to yield material results 6-9 months from now.
============
By the way a vehicle driving 12,000 miles per year at 30 mpg uses approximately 10 barrels of oil per year. Those are in fact typical global numbers that are reasonable for a calculation of this nature. Bear in mind that the world consumes approximately 100-million barrels of oil per day and you can see that the impact of BEV stocks increasing over the next couple of years are not going to be that material. A few years after that they do indeed become material, but not quite yet (there are all sorts of reasons Putin calculated that he had to make a move on Ukraine at this time, not later). Here are the sums if you want to inspect them:
View attachment 799085
By 2030 my central scenario has global BEV stocks at 40-million .......
- Assume 10 barrels of oil/year...that would mean 10*42= 420 gallons of oil converted
- 3/4 to fuel (gas and diesel).
- Of that 20 is to petrol so 20*10=200 gallons.
- Driving 14,000 miles/year would mean you were getting 70 MPG from a car.
- Average new car fleet milage is reported right at 25 or so. The existing fleet is going to be far worse. So 22 to be generous.
- This would mean that if we exclude diesel the fleet moving to EVs will replace oil much faster than the spreadsheet (which is very nice). Just in the US it would be 31.8 barrels. This is why the Cybertruck is so so important in the US market as in the Ford Lightening and Rivian's products.
- in the EU I would assume miles driven would be lower and fuel economy higher but the metric of 10 barrels/year seems very low. Also I don't know what proportion of the fleet is diesel. But in any case only about 3/4 of the barrel of oil is converted to fuels. 1/3 to diesel and 2/3 to gas (or thereabouts).
- Looking at heavy truck driver in the US might average 600 miles per day
- Truck MPG is 6.0 (just a gross average-so many differences)
- 100 gallons of fuel/day
- 10 barrels of oil per day to create the diesel needed to run a heavy truck. Huh...I am no petroleum engineer and I assume a refinery can be setup to produce diesel from certain feedstocks more readily than others. Just an assumption I won't look up.
I had also missed the MLRS deployment. HA...now things become clear, now I can see Austin starting to get involved. We've doubled/tripled down in Ukraine. This and the polish tanks and the ghost drones; now we are providing Ukraine with heavy weapons. In the US army a single MLRS battery replaced an entire howitzer battalion and fires 12 times as fast. It is indeed a game changer. Very interesting @wdolson
EDIT: I can't find any other source that mentions the US sending MLRS. It would be quite the escalation of heavy weaponry, let us know if you see any more news on that. I have seen lots of posts on the 18 155mm howitzers, czech and slovakian and polish self propelled and towed howitzers, etc but a single MLRS launcher would be an equivalent.
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bbl is 42 gallons of petroleum, but they produce about 45 gallons of product with processing gain due to the product having lower density.
www.eia.gov
1 bbl is 42 gallons of petroleum, but they produce about 45 gallons of product with processing gain due to the product having lower density (including gasoline).
So I think it's better to use 45.
Refining crude oil - inputs and outputs - U.S. Energy Information Administration (EIA)
An overview of and data on inputs of crude oil and other liquids in oil refineries and resulting products of oil refining.
So I think it's better to use 45.
petit_bateau
Active Member
To my eyes you are overthinking this.
For practical reckoning of the type I have set out in my calculations you can assume that one barrel of generic crude oil can be turned into one barrel of either gasoline (petrol) or diesel.
You can ignore refinery losses, and for that matter refinery gains (volume, density, and mass don't always 'shrink'), and refinery internal use. They are just a few %.
A refinery is not just a distillery. It is a lot more than simple a fractionating column that separates out the fractions of the raw crude. It can chop up and recombine the feedstock to give different stuff than a basic distillery. (Within reason of course, and also depending on the variety of input crudes it is set up to handle). But for an analysis of the sort I have just sketched out you can take the very simple view that 1 barrel crude = 1 barrel of gasoline or 1 barrel of diesel.
Ditto, don't worry about regional variations in vehicle type, fuel efficiency, distance driven. It all averages out. Anyway I have more complicated spreadsheets that do that stuff and really it just gets to much the same answer which is why I picked the simple numbers I did.
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I'm not sure if the Ukraine has MLRS in theatre yet, or if so where they sourced it from, or what munition types they are using. Opinions vary out there on the net. But indeed, yes, NATO-standard artillery is arriving and I'm sure they will go on the offensive when they are ready.
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edit : I see ItsNotAboutTheMoney has also explained the wierdness of refinery gains as well as losses, our posts crossed. But really for this sort of analysis don't overcomplicate the thinking.
I agree with both but...the point still holds at least for the USA where light vehicles are almost all gasoline vs diesel. A barrel yields about 20 gallons of gas. EV's kill the consumption of gas, 12 million EVs replace the gasoline from a million barrels of oil per day...but it also removes 10 million gallons of diesel fuel from the market.
My aha here is that unless the oil industry can manipulate the proportion of diesel (which I assume they can to some extent but how much?) the EV movement will start increasing the price of diesel fuel as the demand for gas but NOT diesel falls so the refinery will have to process a barrel to produce a profitable product (diesel) but have to dump gas. It's not that the demand for oil is dropping it is the demand for gas that is going to get crushed first. There are still few if any replacements for diesel equipment/trucks. What says the forum? Is that correct?
I agree with your comment on the MLRS systems, I don't see that anywhere else.
I might think more on this later.
petit_bateau
Active Member
A refinery can indeed hugely manipulate the proportion of diesel vs the other stuff that comes out. For practical purposes just ignore this issue in respect of this discussion.
That is the difference between a refinery and a distillery. My ex-colleagues used to sneer at low-end refineries and call them "mere distilleries".
Yes, most refineries have quite a lot of flexibility in which proportion of distillates they produce from a barrel of crude. But it isn't like flipping a light switch. It takes a fair amount of time to refit the hydro-crackers and such when the goal is to increase diesel fuel yield, for instance.
Which basically increases the cost, so the effect is going to be similar.
Satellite photos show missiles being loaded onto Russian submarine. Dolphin pens, too.
https://www.space.com/russian-submarine-missile-loading-satellite-photo
I haven’t seen this reported elsewhere. Not surprising.
https://www.space.com/russian-submarine-missile-loading-satellite-photo
I haven’t seen this reported elsewhere. Not surprising.
SageBrush
REJECT Fascism
I know *very* little about this topic, so please correct what I say below as needed:
Most of the hydrcarbons are straight chain aliphatics, and diesel are longer chains than 'petrol.' A refinery can break long chains into smaller ones. I don't know if possible in a garden variety refinery, or what is involved, in making longer chains from short chains.
There's quite a lot of chemistry involved, but this flow chart should give a better sense of the refinery flows.
I believe the US Navy also works with dolphins. IIRC we saw dolphins and it was explained that they are used to help locate mines when we took a boat tour of the San Diego Naval Base last year. Yep I just googled it - https://www.niwcpacific.navy.mil/marine-mammal-program/
