Shorting Oil, Hedging Tesla

[ValueAnalyst]

US inventories are far above normal. Prior to March 2015 they've never even approach current levels.

Absolute levels do not incorporate rising demand, so better look at difference from a moving average:

Further, this graph overestimates commercially available inventories, because it does not factor in higher pipeline fill.

This thread explains more of the bullish factors missing from the above graph: ValueAnalyst on Twitter

 

[mspohr]

Nissan will introduce 8 new EVs, sell 1 million electrified vehicles by 2022

NIssan aims for annual production of 1 million EVs by 2022.
Many other automakers have similar plans. It all adds up to millions of EVs on the road over the next few years.
It should snowball the decline of fossil fuel. Hard to predict the timing but it looks inevitable.

 

[jhm]

Elon has been flying below the radar on another way to undermine demand for diesel. Oddly, enough he has been doing this with plenty of hype too.

I would encourage people to read the FAQ for The Boring Company, FAQ. Obviously, we've been thinking of these "loops" as electric transportation systems, and that is quite valid as a way to defeat demand for transport fuels. But notice the challenge TBC is taking on, tunneling roads costs about $1B per mile. As SpaceX is doing with space travel, TBC is trying to knock 90% or more off the cost of tunneling. One of the ways you do that is by electrifying the large tunnel boring machines. These have run on diesel and much do an incredible amount of work to cut a mile. Electrification will also allow TBMs to exert more power and bore faster. TBC want to fully automate them. Also they are automating the process of put the tunnel casing. I would expect this includes automating the removal of debris. So automation and electrification are keys to cutting the time and cost per mile. Also announce recently, TMC will be selling life size Lego block from hard material removed from tunnels. These can be used for low cost construction locally. They also defeat carbon emissions from by displacing concrete. So this creates a co-production revenue stream while cutting the removal cost and fuel consumption related to removal of excavation debris.

So imaging a highly automated, fully electrified excavation system including transport rail cars, loaders and trucks to haul away muck. Naturally, Musk is interested because this is exactly what he needs to make habitations on Mars, but here on Earth this represents an awful lot of electrification and cost cutting technology for heavy earth moving operations. This naturally branches out to mining and other construction endeavors. All of these industries need to be electrified to defeat carbon emissions and to erode diesel demand. So Elon is quietly hyping the whole thing right beneath our noses.

 

[TheTalkingMule]

Elon has been flying below the radar on another way to undermine demand for diesel. Oddly, enough he has been doing this with plenty of hype too.

I bet if you asked your 2002 self what would be driving mining and construction efficiency in 2020 your answer was unlikely to be, "An Earth-based trial run for the colonization of Mars."

 

[justvisiting]

I bet if you asked your 2002 self what would be driving mining and construction efficiency in 2020 your answer was unlikely to be, "An Earth-based trial run for the colonization of Mars."

it is also very unlikely to actually become the answer...

 

[jhm]

it is also very unlikely to actually become the answer...

Ok, name a technology innovating construction or mining that is NOT needed for colonizing Mars.

 

[Off Shore]

it is also very unlikely to actually become the answer...

So just, your posts so far amount to nothing more than "No, it ain't!" If you'd like to avoid ending up on my ignore list (and perhaps those of others), how about providing something more substantive?

 

[mspohr]

So just, your posts so far amount to nothing more than "No, it ain't!" If you'd like to avoid ending up on my ignore list (and perhaps those of others), how about providing something more substantive?

He only has 19 posts and already getting to the "ignore" category... is this some kind of record?

 

[ggr]

Mod: I'll remind people that disparaging other members by discussing putting them on the ignore list is verboten. If you do it, do it silently. One more and I'll move them all to snippiness. --ggr

 

[justvisiting]

Ok, name a technology innovating construction or mining that is NOT needed for colonizing Mars.

thats not what i was talking about.
Thetalkingmule suggested in his post that the boring company will be "driving mining and construction efficiency" in 2020. Considering that it already is 2018, and that the boring company is doing nothing more than digging holes with outdated equipment under a parking lot, i seriously doubt that they will be more of a driving force in mining and construction in leass than 3 years than the big established players in that sector. You know, companies like Vale or BHP Billiton that mine millions of tons of different metals every year or the companies that build tunnels like the Gotthard Tunnel in Switzerland.
Thats my statement, and if you disagree thats okay. But i would love to know how you think the boring company will do it, always open to change my mind

 

[SebastianR]

I'll bring this back on-topic: oil demand and oil demise

all energy from oil is "quickly" shuttered? do you understand what kind of time frames you are talking about?
electric buses are discussed, yes, and sometimes even implemented.. they will be a rounding error in the global demand figure
and dont believe everything you hear about the spare capacity in SA and Russia.. its more likely pretty small and only a hollow threat

and lastly, despite the glorious shale, inventories are lower then normal and will begin to draw even more now

The question is, what is "quickly". Today, the growth in oil demand is very small in comparison to the total market (it is enormous in terms of actual numbers but in terms of % it is very small). At the same time, "oil alternatives" show tremendous growth rates (albeit from small total numbers). The situation as I see it is as follows:

1) Electric buses are a reality in China today. They are becoming a reality in some parts of Europe and the US. Germany is lagging far behind in this market.

2) Electric vehicle sales double roughly every 18 months (again driven by China)

3) There is the death by a 1000 cuts for oil & gas uses in energy production (solar is killing both coal and gas, solar + batteries are killing gensets)

4) We will see a surprising amount of specialty uses of batteries: think mining trucks (open mines, but also underground), think electric ferries, think electric barges etc.

5) With the challenges of air quality in Europe, Diesel powered transport will be a thing of the past in the coming 10 years in inner cities of most European countries (fun fact: when speaking to a couple of Bosch folks who are "in the know" - they think that Diesel as a technology is dead - there are public statements that aim to keep Diesel alive for a little longer but internally they all know Diesels are dead).

With all of the above the key question is: when will oil enter its terminal decline? Well, we have discussed this back and forth in this thread. I will not repeat it all. But drivers aside from the above is obviously how India is developing (China is lost to oil demand growth), how soon we will face another global recession and how quickly battery production will be able to scale.

Lastly: humans are pretty crap in doing proper estimations: we collectively think that way too much will happen in the coming 2-5 years. And we collectively underestimate how much will happen in the coming 10-15 years. I mean 15 years ago Tesla wasn't even founded and the idea of a new-comer car maker stealing 30% of auto news media attention with zero dollar advertising in traditional media seemed utterly laughable. So what is laughable today that will be a reality in 15 years from now?

 

[winfield100]

I bet if you asked your 2002 self what would be driving mining and construction efficiency in 2020 your answer was unlikely to be, "An Earth-based trial run for the colonization of Mars."

to be able to visualize the future, it helps to have read Science Fiction for 56 years, that give the "if this happens, what would come from it?"

 

[winfield100]

thats not what i was talking about.
Thetalkingmule suggested in his post that the boring company will be "driving mining and construction efficiency" in 2020. Considering that it already is 2018, and that the boring company is doing nothing more than digging holes with outdated equipment under a parking lot, i seriously doubt that they will be more of a driving force in mining and construction in leass than 3 years than the big established players in that sector. You know, companies like Vale or BHP Billiton that mine millions of tons of different metals every year or the companies that build tunnels like the Gotthard Tunnel in Switzerland.
Thats my statement, and if you disagree thats okay. But i would love to know how you think the boring company will do it, always open to change my mind

15 minutes, downtown Baltimore to downtown Washington DC.
proof of concept project somewhat
Boring Company map shows S. Paca St. as Baltimore terminus of 'Loop' tunnel - Technical.ly Baltimore

 

[winfield100]

I'll bring this back on-topic: oil demand and oil demise
4) We will see a surprising amount of specialty uses of batteries:...think electric ferries....etc.
5) With the challenges of air quality in Europe, Diesel powered transport will be a thing of the past in the coming 10 years in inner cities of most European countries (fun fact: when speaking to a couple of Bosch folks who are "in the know" - they think that Diesel as a technology is dead - there are public statements that aim to keep Diesel alive for a little longer but internally they all know Diesels are dead).
...... So what is laughable today that will be a reality in 15 years from now?

53+ megawatts of batteries, in 53 ferry boats, cutting fuel costs --> 80%......and emissions --->>> 95% <<<---
All-electric ferry cuts emission by 95% and costs by 80%, brings in 53 additional orders

 

[jhm]

thats not what i was talking about.
Thetalkingmule suggested in his post that the boring company will be "driving mining and construction efficiency" in 2020. Considering that it already is 2018, and that the boring company is doing nothing more than digging holes with outdated equipment under a parking lot, i seriously doubt that they will be more of a driving force in mining and construction in leass than 3 years than the big established players in that sector. You know, companies like Vale or BHP Billiton that mine millions of tons of different metals every year or the companies that build tunnels like the Gotthard Tunnel in Switzerland.
Thats my statement, and if you disagree thats okay. But i would love to know how you think the boring company will do it, always open to change my mind

Ok, tell me what these companies are doing to electrify and to bring robotics into mining or construction. These are the things that are necessary to be able to colonize Mars. At least oil companies have been developing tech for subsea robotics and automation. So it not like Musk companies are the only ones doing this. Electrification and automation are things that nearly all heavy industries should be working on.

 

[justvisiting]

15 minutes, downtown Baltimore to downtown Washington DC.
proof of concept project somewhat
Boring Company map shows S. Paca St. as Baltimore terminus of 'Loop' tunnel - Technical.ly Baltimore

they do have very ambitious concepts, like all msk endeavors, thats certainly true
but great plans and the real world are two different things, and right now i just dont see them as drivers of innovation.. but its okay to disagree

 

[justvisiting]

Ok, tell me what these companies are doing to electrify and to bring robotics into mining or construction. These are the things that are necessary to be able to colonize Mars. At least oil companies have been developing tech for subsea robotics and automation. So it not like Musk companies are the only ones doing this. Electrification and automation are things that nearly all heavy industries should be working on.

just because they dont twitter about it does not mean they are not doing it... and what concrete examples can you give for advancements made by the boring company?

 

[winfield100]

just because they dont twitter about it does not mean they are not doing it... and what concrete examples can you give for advancements made by the boring company?

just curious, are you a low level AI or bot? i see little positive from you, just questioning questions, like Eliza would ask.
it's almost like "tension and dissension" is the goal, (srry abt mispelling of dsssension tho)

 

[mspohr]

National Grid backs plan for earlier petrol and diesel ban
National Grid backs plan for earlier petrol and diesel ban

UK National Grid is fine with a 2030 phase out of fossil fuel cars.
Could handle 9 million EVs with no new power stations.
Would halve the UK oil imports by 2030.
May revise estimate of number of EVs upward.

 

[jhm]

just because they dont twitter about it does not mean they are not doing it... and what concrete examples can you give for advancements made by the boring company?

As I've said TBC is flying under the radar. You can look at their website and see what they are working on. How much they have actually accomplished remains hush. I would expect they have already electrified the TBM and are working on design concepts for something new. But there is little need for Musk to make this public. Like SpaceX, he will probably design his own TBMs for his own use and not to sell to competitors. Just being able to tunnel at a fraction of the cost of competitors is a huge opportunity.

One can point to established players all you want, but that does not mean they are prepared to compete with an innovative entrepreneur who can find new ways to undercut on cost. None of the established space launch companies are prepared to compete with SpaceX on cost, but they have really impressive launch resumes.

Elon gains little by tipping off competitors just how far along his companies are. What is super visible is this Baltimore-DC line. This 35 mile line would take competitors on order of $35B to complete, and that would require lots of public funding. If TBC is able to complete this in under 24 months with out public funding, it will represent a huge step forward in the speed and the cost of tunneling. The fact that only private money is being used is a huge indication that costs have already been cut. Private investors, Musk included, are not going to foot a $35B bill for effectively two lanes of underground highway. To get a positive ROI at that level of capital, you would need really high tolls and a lot more throughput. If OTOH Musk is able to get the cost down below $7B, then investors have got a shot at something commercially viable.

I really critical question in this project is, who is investing in it and how much are they investing? Naturally, Musk is willing to throw some of his wealth into it, maybe a few billion. But he probably needs other investors, which would only come on board if he had a credible plan for cutting the cost of the project.

The point of this speculation is not to say that I know something, but simply to point out that there is much that Musk is not telling the public about his costs, technological advances and financing involved. So we'll simply need to wait and see how this project plays out.