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#4,881
RobStark said:
White House to automakers: Back Trump emissions plan or face costly Calif. rules
Click to expand...

About time, the automakers were using the CAFE standards as a pretext to cover moving production outside of USA. Both the republicans and the democrats obliged. Trump doesnt really care one way or The other about about fuel economy, but he does care about keeping factories in USA. He is calling the auto makers bluff.

Remember, the automakers are very skilled at zero sum negotiation. They really dont like this. If the automakers dont commit to USA production, trump might just extend california's regs to cover the entire nation. Quid pro quo.
 
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#4,885
jhm said:
Norway’s $1 Trillion Wealth Fund To Dump All Its Oil & Gas Stocks | OilPrice.com
Smart move.
Click to expand...

Agreed that this is the smart move, but to be fair and complete, Norway's Wealth Fund also gets it's primary funding from Norway's Oil & Gas resources in the first place. So reinvesting in more O&G is doubling down.

Employees of companies are encouraged by financial planners not to over invest in the company they work for in the name of diversification - so that problems for the company they work for don't automatically also hit them in their investments, and vice versa. For the Norwegian Wealth Fund, this is sort of analogous.
 
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#4,886
Semi-OT, but.....

EIA now projecting onshore wind to literally end in 2022 after PTC phase out. This is almost getting embarrassing!

New U.S. power plants expected to be mostly natural gas combined-cycle and solar PV - Today in Energy - U.S. Energy Information Administration (EIA)

main.png
 
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#4,887
Bloomberg - Are you a robot?
OPEC Supports Crude Prices Amid Talk that Chinese Demand will Peak in 2025

From Bloomberg:
China’s electric vehicle penetration will reach 6.4 percent by the end of the decade and keep rising to 80 percent by 2040, according to Morgan Stanley, adding that an aggressive push by local battery companies into technology innovation may speed up that timeline.

Meanwhile the country is seeing solid growth in high-speed rail ridership, driven by a well-developed network and severe traffic congestion. Highways’ share of passenger turnover fell to 27 percent last year from 55 percent in 2012. In the U.S., the figure was 87 percent last year, according to Morgan Stanley.

Electric vehicles and high-speed rail are “a disruptive force on China oil demand,” the analysts said. “This pattern has been ignored by most investors in developed markets as there is no such experience from any precedent.”
Click to expand...

High-speed rail is a threat to demand for jet fuel along with motor fuels. The shift in share of passengers from 2012 to 2018 also could imply some avoidance of growing automotive and aircraft fleets in that time and for the future. This helps minimize the number of fossil powered vehicles that must be replaced with electrics. That's how you get to an 80% electric fleet by 2040. So high-speed rail is actually assisting in the conversion of the auto fleet to all electric.

China is predicting that gasoline consumption with peak by 2025, but with diesel already in decline I think there is substantial opportunity for crude consumption to peak in China a year or two before 2025.

It's always amusing how analysts want to pivot to other growth opportunities like India when news like this comes out. As if the massive advance of EVs in China could not possibly spill out to other countries. As if China would not be keenly interested in exporting EVs around the world. As if the price of EVs made in China could not possibly undercut the price of ICE vehicles built anywhere in the world. Polar bear logic: if the ice is too thin on this iceberg, we'll just swim to another iceberg.
 
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#4,889
TheTalkingMule said:
Semi-OT, but.....

EIA now projecting onshore wind to literally end in 2022 after PTC phase out. This is almost getting embarrassing!

New U.S. power plants expected to be mostly natural gas combined-cycle and solar PV - Today in Energy - U.S. Energy Information Administration (EIA)

main.png
Click to expand...
I suspect that this methodology is substantially ignoring the role of batteries and other storage. Batteries create substantial LACE value for wind and solar, but decrease (through competition) the LACE value of thermal generators. Think of it this way suppose you have enough battery capacity to avoid the need for gas peakers. That is, the LACE of batteries is largely driven by the avoided cost of ridiculously high (LCOE) of fossil peakers. As that battery capacity comes online, the question becomes, what it the cheapest way to charge those batteries? Here the low cost (LCOE) of solar and wind compete and complement each other. NGCC is not going to compete well as a way to charge batteries.

One way to think of LACE is that it is roughly the value of power when it is produced. Solar has an LACE advantage over wind because there is more daytime demand than nighttime demand. So right off the bat, the time when batteries will charge will be whenever the cost of power is lowest. So this will necessarily jack up the LACE of wind especially overnight when demand is low. EV charging demand will also come into play here, though I expect the EIA is ignoring that too. In sum the battery charging will improve the LACE the most wherever it is the lowest. EIA claims that the LACE for NGCC is higher than for solar and wind, so it will benefit the least from growth in battery charging demand.

Mule, I'm glad you posted this. Not at all off topic, once you realize that the role of batteries are really key understand why this analysis might not hold up in reality.
 
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#4,891
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#4,893
RobStark said:
White House to automakers: Back Trump emissions plan or face costly Calif. rules
Click to expand...

That's.... dumb. On the part of Trump. As usual.

The automakers CANNOT be seen publically siding with Trump; most of them know that that's sales suicide. (Maybe Ford can get away with it since they've decided to *only* produce trucks.) Most will continue to ride the fence. Some will say "Hell, we know the California rules will go into effect in 2021 with the next President anyway" and come out loudly in favor of the California rules to boost sales.
 
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#4,894
adiggs said:
I agree with your comment that OPEC is stuck. It looks like at the price they want, those lunatics in the US will just keep funding unending expansion of shale and stealing market share at small margins, breakeven, or losses.

To combat they, they can bring a lot of supply into the market and drive the price down, but that'll hurt OPEC as well.
Click to expand...
Every OPEC country except Saudi Arabia is going to turn on the spigots and sell everything they can as fast as they can while it's still worth something. Or at least everything they can produce with a marginal profit.

Saudi Arabia's behavior, who knows; they're run by nuts.
 
#4,896
jhm said:
It's always amusing how analysts want to pivot to other growth opportunities like India when news like this comes out. As if the massive advance of EVs in China could not possibly spill out to other countries. As if China would not be keenly interested in exporting EVs around the world. As if the price of EVs made in China could not possibly undercut the price of ICE vehicles built anywhere in the world. Polar bear logic: if the ice is too thin on this iceberg, we'll just swim to another iceberg.
Click to expand...
FYI, China is interested in exporting their high speed rail too... and has started doing so.
 
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#4,899
What i dont undetstand us why did FCA penalties when they had the 4th largest credit balance? Mis-classifications perhaps.

Anyway, FCA feels like the weak one, if fuel economy penalities hurt their viability, then thats pretty good political justification for weakening those penalties. Straw that breaks the camel's back (etc etc)
 
#4,900
Car Companies Close Stores As The “Amazon Effect” Takes Hold | OilPrice.com

Here is an interesting take coming from an OilPrice.com contributor. The trend is pretty clear. All retail is headed online. In that light car shopping should be no different. What this author does not spell out is that all ICE makers are stuck with complex dealer relationships that will make it hard for them to shift to online sales model. Sure dealerships will close, but GM and Ford can't just sell online like Tesla does. So he does not spell this out, but it is pretty damning for the oil industry. ICE sales will face headwinds that Tesla or some EV upstart does not.

I think this compounds the Osborne effect: auto dealers are just as obsolete as the gas-burning contraptions they haggle over.
 
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