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ValueAnalyst
Closed
I'm simply thinking of energy investments as a leading indicator of the future energy mix. Having fossil fuel investment fall from $300B in 2016 to $144B in 2017 while renewable energy investments grew from $300B to $333B is a pretty striking contrast. Both sets of investments are going to be paying out usable energy for years to come, which is how it is a leading indicator. The present tightness in oil is a consequence of how much oil investment pulled back last year.
Also investment level reflects the expectations of investors. Oil investment pulled back last year in part because the risk adjusted returns did not look so attractive. For example shale companies wanted to be profitable and OPEC countries wanted to fund their budgets.
So maybe in 2017 oil was still in glut recovery mode. How are investments this year? Will fossil investments return to the $300B level? There must be some data out there on how 2018 is stacking up. Post it if you come across it.
On another note it is striking how so much of the oil narrative has shifted to handwringing about high oil prices dampening demand. Seems to be a reaction to Brent touching $80 today. I'm always hawkish on demand erosion, but it is curious to see the media and outfits like IEA jump into this. Not sure what it all means, just noting it.
ValueAnalyst
Closed
Thank you. I will post any investment figures if I come across them. My guess is that 2018 will be higher than 2017, and 2019 will be substantially higher than 2018, as oil prices continue to surge, making many projects that were previously shelved now profitable. This, however, I don't think will mean fossil fuels will play an increasing role in coming years. The future is in Tesla's hands to change: if the company can ramp its production as planned, then at some point around 2025, the tide will turn monumentally. Tesla Semi and Tesla Network are the keys to that future.
Cool! It will be a great day when we see rejected energy decline. Especially, when rejected energy in transportation declines, it will likely be that electrification is taking over. Currently all but 21% of energy for transportation is rejected, waste energy. Eva should be around 90% efficient. So as EVs take over the transportation efficiency can go up quite alot.The 2017 LLNL Energy flow chart is out. We used less Natural Gas, Coal, and Petroleum than in 2016 and everything else went up.
Cool! It will be a great day when we see rejected energy decline. Especially, when rejected energy in transportation declines, it will likely be that electrification is taking over. Currently all but 21% of energy for transportation is rejected, waste energy. Eva should be around 90% efficient. So as EVs take over the transportation efficiency can go up quite alot.The 2017 LLNL Energy flow chart is out. We used less Natural Gas, Coal, and Petroleum than in 2016 and everything else went up.
This chart is one of the best ways to explain the difference between primary energy (left side) and final energy (right side). Often when fossil fuel supporters want to impress you with how much energy hydrocarbons provide and how little solar or wind provide, they will quote primary energy units. But in the case of solar, wind and hydro, the electricity produced is counted as primary. But really that is a bunch of hot air because it is only the final energy that is useful, that makes any positive impact on the economy. Renewables do not have to replace primary energy, they only need to replace final energy, energy services.
For example, transportation uses 28.1 quads of primary energy, but with complete electrification only 5.91 quads is needed. So about 6.5 quads of wind and solar (allowing for some energy losses in transmission and charging) is needed. Currently wind and solar provide about 3.55 quads, so adding just double the wind and solar we currently have would suffice for complete electrification of transportation.
So if someone were to challenge me with the idea that renewables really don't produce much energy or that the EV revolution is going to create a bunch of demand for coal and natural gas, I could just tell them that wind and solar in the US are already sufficient to power the whole transportation sector if it were fully electrified. I could also say that wind and solar already provide about 84% of the useful energy as coal does. Or for really big picture, wind and solar alone provide about 11% of all energy services (2.55 out 31.1 quads).
Edit. Correct calc on coal. 14 quads primary at 30% efficiency is 4.2 quads of useful energy.
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The Myth Of An Imminent Energy Transition | OilPrice.com
Well looky here! It's one of those "fossil fuels are so big in primary units that tiny ole renewables can possibly make a dent" articles. I only post it here as a timely example of genre of fossil fuel propaganda nonsense.
The author also show a chart of annual investments in renewables that has been flat for the last ten year in dollar amounts, but falls to show the same for fossil investment which have plummeted from former glory days. An important point missed is that wind and solar have been declining about 7% and 15% each year. So as dollar investments have stayed level, actual GW capacity installed has continued to grow exponentially.
This is a really misleading presentation that is supposed to make you think that renewables won't have any significant impact in the near future. This is just an illusion. When the US doubles wind and solar, just 3.55 quads more, it will have the impact of knocking out nearly 12 quads primary of mostly coal and natural gas, which combined are 42 quads. So doubling wind and solar knock the living crap out 28% of coal and natural gas demand. This can happen in as little as 6 years. That seems fairly imminent to me.
Well looky here! It's one of those "fossil fuels are so big in primary units that tiny ole renewables can possibly make a dent" articles. I only post it here as a timely example of genre of fossil fuel propaganda nonsense.
The author also show a chart of annual investments in renewables that has been flat for the last ten year in dollar amounts, but falls to show the same for fossil investment which have plummeted from former glory days. An important point missed is that wind and solar have been declining about 7% and 15% each year. So as dollar investments have stayed level, actual GW capacity installed has continued to grow exponentially.
This is a really misleading presentation that is supposed to make you think that renewables won't have any significant impact in the near future. This is just an illusion. When the US doubles wind and solar, just 3.55 quads more, it will have the impact of knocking out nearly 12 quads primary of mostly coal and natural gas, which combined are 42 quads. So doubling wind and solar knock the living crap out 28% of coal and natural gas demand. This can happen in as little as 6 years. That seems fairly imminent to me.
TheTalkingMule
Distributed Energy Enthusiast
US commercial stockpiles are still 3.4% higher than they were on Jan 1, and 20% higher than May 2014.
Doubling wind and solar should take only 3 years. (The US may be slow, but this is the world scenario.)
From 2017. So that's 2020.
The investment case for natgas is dead; this will be noticed by 2020. Big question is when money for oil, as opposed to gas, will dry up. It's already a bad investment but the question is when banks and fund managers will recognize this.
The IMO shipping rules require refineries to retool. The high sulfur gasoil is now unsaleable toxic waste; they have to rearrange the refinery to desulfurize it and crack it to saleable substances. The refiners who are already set up for this are expected to profit short term. The others face large capital costs, with poor ROI.
The decline in diesel and gasoline demand will do the same thing as refiners scramble to maximize jet fuel production. Large capex needed just to stay competitive with the other refineries, with no real ROI beyond "stay open". This in a market of declining demand.
The refinery shakeout will be brutal; refineries will not make money. Since upstream doesn't make money for the IOCs either (only the NOCs have cheap enough production to make money on crude), this leaves the IOCs supporting an oversized upstream/midstream business off their small petrochemical divisions.
Dang it. I was looking back at these charts and realized I had confused the wind contribution of 2.35 quads with hydro at 2.77 quads. So my numbers above are a little off by the difference in these two numbers. I had also confused 2.55 with 3.55. Oy, this is what happens when I'm sleepy. It is unfortunate that I cannot go back to edit those post.
On the upside, it's nice to see that wind is providing nearly as much energy as hydro! Wind production only needs to grow by 18% to catch up with hydro, and it has been growing about 13.5% annually from 2011 to 2016. So wind should surpass hydro in generation by 2019. One caveat is that hydro can vary a lot from year to year depending on annual rainfall.
On the upside, it's nice to see that wind is providing nearly as much energy as hydro! Wind production only needs to grow by 18% to catch up with hydro, and it has been growing about 13.5% annually from 2011 to 2016. So wind should surpass hydro in generation by 2019. One caveat is that hydro can vary a lot from year to year depending on annual rainfall.
RobStark
Well-Known Member
GM will equip big '19 pickups with I-4 turbo in mpg battle vs. Ford, Ram
GM is doubling the number of engines available on the retooled 2019 Chevrolet Silverado and GMC Sierra, including a new four-cylinder turbocharged engine that can run on two cylinders to increase fuel economy. The 2.7-liter I-4 turbo engine is a major milestone for the company
GM is doubling the number of engines available on the retooled 2019 Chevrolet Silverado and GMC Sierra, including a new four-cylinder turbocharged engine that can run on two cylinders to increase fuel economy. The 2.7-liter I-4 turbo engine is a major milestone for the company
Point well taken. I've notice that there end user efficiency numbers are constants that have nothing to do with changes in source mix. For example if the ratio of gas to coal changes in power generation, this really does impact the amount of waste heat rejected, but LLNL uses a simple efficiency rate that does not adjust to factor in the change in gas to coal ratio. This sort of simply minded analysis is not suitable for understanding how the amount of rejected energy will change as the result of renewables and electrification of transportation. It's a nice descriptive chart, but not what you need for serious analysis.
Dang it. I was under the impression that the EIA uses electrical heat content for hydro, geothermal, solar, and wind, 3412 Btu per kWh. Instead they use a fossil-fuel heat rate, which was 9232 BTU per kWh in 2016. So much of my analysis in recent post is profoundly screwed up by this.
It also means that not all "rejected energy" was ever really energy to begin with. For example, 1 kWh of wind or solar counts as 9232 Btu of consumption, but 9232 - 3412 = 5820 Btu is counted as "rejected energy". This is why the flowchart does not really show how wind and solar leads to less actual waste energy.
Glossary - U.S. Energy Information Administration (EIA)
https://www.eia.gov/totalenergy/data/monthly/pdf/sec13_6.pdf
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Let's see if I can get something right. Solar and wind are at 3.125 quads in 2017, up 16.3% from 2.287 quads the year before. The contribution of natural gas, coal and petroleum to power generation is 22.45 quads. So that power generation is net zero fossil fuel, wind and solar could replace the 22.45 quads adding it to the 3.125 it already provides. Thus, we need wind and solar to grow 8.184 times its current size. Continuing at 16.3% rate, this would take 13.92 years, to be reached by 2031. At the slower 10%/y rate, we'd hit this market by 2039.
Here I am glossing over several things. Net zero fossil fuels does not mean that no fossil fuels are used for power generation, rather, I envision export of a surplus power to the gas market (via hydrogen electrolysis) to net out with imports of natural gas into the power market and export of electricity into transportation (via EVs) which offsets petroleum consumption. So basically the imports from fossil fuels into the grid are matched by exports of electricity into industrial gas and transport fuel markets. This net zero emissions grid could be realized in the 2030s.
For wind and solar to completely displace fossil fuels, we've got 78.2 quads to replace which is 26 times current wind and solar. At 16.3% growth this takes 21.58 year or at 10% growth 34.19 years. So sometime in 2039 to 2051, deep decarbonization could be realized. This of course is ignoring growth in energy demand over that time as well as efficiency gains along the way. These would imply adjustments to growth rates by just a few points, so the market can easily accelerate deployment of renewables to keep pace with demand growth. After about 2030 virtually all incremental energy needed will be renewable, so fossil fuel assets will simply be in run off mode thereafter, just pumping till the well runs dry or the pump breaks down.
Here I am glossing over several things. Net zero fossil fuels does not mean that no fossil fuels are used for power generation, rather, I envision export of a surplus power to the gas market (via hydrogen electrolysis) to net out with imports of natural gas into the power market and export of electricity into transportation (via EVs) which offsets petroleum consumption. So basically the imports from fossil fuels into the grid are matched by exports of electricity into industrial gas and transport fuel markets. This net zero emissions grid could be realized in the 2030s.
For wind and solar to completely displace fossil fuels, we've got 78.2 quads to replace which is 26 times current wind and solar. At 16.3% growth this takes 21.58 year or at 10% growth 34.19 years. So sometime in 2039 to 2051, deep decarbonization could be realized. This of course is ignoring growth in energy demand over that time as well as efficiency gains along the way. These would imply adjustments to growth rates by just a few points, so the market can easily accelerate deployment of renewables to keep pace with demand growth. After about 2030 virtually all incremental energy needed will be renewable, so fossil fuel assets will simply be in run off mode thereafter, just pumping till the well runs dry or the pump breaks down.
$80/bbl Might be Fatal for Gasoline – dollarsperbbl
Here's a really nice analysis suggesting that gasoline consumption may peak by 2021. Essence of argument is that US consumed 40% of global supply of gasoline. The rise in fuel economy in later models locks in a steady rise in efficiency as old low MPG vehicles are replace by newer high MPG vehicles. Vehicle growth in places like China are already mostly newer high MPG vehicles cannot really make up for the loss of old gas guzzlers in US. Transition to EVs only further this trend to lock in long term sift to higher MPG. So EVs do not strongly factor into a 2020-2021 peak, but do assure continued decline thereafter.
Here's a really nice analysis suggesting that gasoline consumption may peak by 2021. Essence of argument is that US consumed 40% of global supply of gasoline. The rise in fuel economy in later models locks in a steady rise in efficiency as old low MPG vehicles are replace by newer high MPG vehicles. Vehicle growth in places like China are already mostly newer high MPG vehicles cannot really make up for the loss of old gas guzzlers in US. Transition to EVs only further this trend to lock in long term sift to higher MPG. So EVs do not strongly factor into a 2020-2021 peak, but do assure continued decline thereafter.
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