I know folks who work for CSX and they echo this view as well. What I don't understand is: how can shippers actually leave CSX? Aren't they stuck with whoever owns the rail lines at their source/destination?
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I know folks who work for CSX and they echo this view as well. What I don't understand is: how can shippers actually leave CSX? Aren't they stuck with whoever owns the rail lines at their source/destination?
TheTalkingMule
Distributed Energy Enthusiast
Well I'm certainly having a hard time seeing WTI @ $71.25 as a rational price considering the massive glut in the US, but it sure is nice timing for TSLA. By the time Model 3 ramps and they start showing up in John Q American's neighborhood we'll be looking at $4 gas. The math is going to look absurd when people go to make an ICE vs EV car buying decision.
API say a small weekly decline for last week, we'll see what the EIA figure is shortly. I assume it'll be flat and US commercial supply will remain at 436M barrels.
API say a small weekly decline for last week, we'll see what the EIA figure is shortly. I assume it'll be flat and US commercial supply will remain at 436M barrels.
U.S. Shale’s Refining Crisis | OilPrice.com
This is worth a reading. The discussion around light, medium and heavy oil is helpful. The lighter grades yield more of gasoline and lighter distillates, the heavier yield more diesel and heavy distillates. The Saudis and Russia are mostly tightening up supply of middle grades, so this makes it harder for refiners get a blend that produces plenty of diesel and gasoline. The concern here is about limited ability of US refiners to process so much light US crude and perhaps a more limit export market for light.
Turning to our favorite questions about peak oil, this raises some interesting questions.
EVs will primarily displace demand for the middle of the barrel gasoline and diesel. Does this mean that producers of medium crude are more vulnerable to this displacement?
If EVs continue to displace 6 units of diesel for every unit of gasoline and maritime regulations wipe out significant demand for residual fuel oil, does this mean that producers of heavy crude are more immediately vulnerable to falling demand?
I'm sure there are a bunch of technical considerations here, but I suspect that light crude is actually in the best position for long-term demand while heavy crude is in the worst position for near-term disruption. Light would be advantaged by a slower EV disruption of gasoline demand than diesel demand and by non-energy demand for petrochem feedstock.
What do you all think about this?
This is worth a reading. The discussion around light, medium and heavy oil is helpful. The lighter grades yield more of gasoline and lighter distillates, the heavier yield more diesel and heavy distillates. The Saudis and Russia are mostly tightening up supply of middle grades, so this makes it harder for refiners get a blend that produces plenty of diesel and gasoline. The concern here is about limited ability of US refiners to process so much light US crude and perhaps a more limit export market for light.
Turning to our favorite questions about peak oil, this raises some interesting questions.
EVs will primarily displace demand for the middle of the barrel gasoline and diesel. Does this mean that producers of medium crude are more vulnerable to this displacement?
If EVs continue to displace 6 units of diesel for every unit of gasoline and maritime regulations wipe out significant demand for residual fuel oil, does this mean that producers of heavy crude are more immediately vulnerable to falling demand?
I'm sure there are a bunch of technical considerations here, but I suspect that light crude is actually in the best position for long-term demand while heavy crude is in the worst position for near-term disruption. Light would be advantaged by a slower EV disruption of gasoline demand than diesel demand and by non-energy demand for petrochem feedstock.
What do you all think about this?
ValueAnalyst
Closed
ValueAnalyst on Twitter
Distillate inventories are sinking and this has implications for both semi reservations and oil investors
Distillate inventories are sinking and this has implications for both semi reservations and oil investors
TheTalkingMule
Distributed Energy Enthusiast
From what I've read/heard today, the actual Iran impact will be 300-500k barrels per day to the downside. China and others may be reluctant to follow the US lead and will keep on buying Iranian oil.
If that's the case, doesn't shale soon pushing US production north of 12M/day trump the Iran impact? Demand is flat to slightly up and we're adding 2M/day to the equation. What's the problem?
Supply note: US commercial stockpile down 2M to 434M barrels.
ValueAnalyst
Closed
The U.S. Department of Energy is considering nationalizing failing dirty utility providers and energy producers for the sake of “national security” 
EGEB: Crypto-solar alliance, Washington may nationalize failing fossil fuels companies, Indian solar now cheaper than coal
EGEB: Crypto-solar alliance, Washington may nationalize failing fossil fuels companies, Indian solar now cheaper than coal
So mad about this. What happen to "free markets" and not picking winners and losers? What happened to the conservative Republican? oh yeah, nothing, always been about greed.The U.S. Department of Energy is considering nationalizing failing dirty utility providers and energy producers for the sake of “national security”
EGEB: Crypto-solar alliance, Washington may nationalize failing fossil fuels companies, Indian solar now cheaper than coal
Ford confirms the only cars it will sell are Mustang, Focus Active
This is telling. Ford plans to reduce sedan portfolio to just two models. Tesla could soon have more models of cars in production than Ford does! This is a retreat into a comfort niche for Ford, just trucks and SUVs.
Of course, Ford says they're bringing a dozen new model EVs to market in the early 2020s, but there is no certainty which of these new models will be a hit like Model 3 or dud like the Bolt. So Ford's exit from the sedan market may prove irreversible, or at least the exit from ICE sedans will be irreversible.
I think this illustrates an issue that EV skeptics may not see so clearly. The number and diversity of ICE models in production will decline over time. This will narrow ICE options for consumers just as the EV options become expanding. ICE models will be old and stale, while EV models are new and fresh. This will motive the middle of the market (as distinct from early adopters and late holdouts) to shift their attention and dollars to EVs. Holdouts will still buy cars like the Mustang for nostalgic reasons, but no one will pine for a Taurus. So Ford is right to keep the Mustang and cut the Taurus. The new Focus Active crossover may serve a transitional need and prove to be one of the last of all-new ICE models. The pipeline of new gas models will thin, just like the global pipeline of new coal plants has thinned. It's just not worth the investment going forward.
So we'll keep an eye on makers like Ford retreating there portfolios into comfort niches like Mustangs and trucks. What they've got lefty to sell is nostalgia. Expect to see lots of overly sentimental ICE ads like those of Subaru.
This is telling. Ford plans to reduce sedan portfolio to just two models. Tesla could soon have more models of cars in production than Ford does! This is a retreat into a comfort niche for Ford, just trucks and SUVs.
Of course, Ford says they're bringing a dozen new model EVs to market in the early 2020s, but there is no certainty which of these new models will be a hit like Model 3 or dud like the Bolt. So Ford's exit from the sedan market may prove irreversible, or at least the exit from ICE sedans will be irreversible.
I think this illustrates an issue that EV skeptics may not see so clearly. The number and diversity of ICE models in production will decline over time. This will narrow ICE options for consumers just as the EV options become expanding. ICE models will be old and stale, while EV models are new and fresh. This will motive the middle of the market (as distinct from early adopters and late holdouts) to shift their attention and dollars to EVs. Holdouts will still buy cars like the Mustang for nostalgic reasons, but no one will pine for a Taurus. So Ford is right to keep the Mustang and cut the Taurus. The new Focus Active crossover may serve a transitional need and prove to be one of the last of all-new ICE models. The pipeline of new gas models will thin, just like the global pipeline of new coal plants has thinned. It's just not worth the investment going forward.
So we'll keep an eye on makers like Ford retreating there portfolios into comfort niches like Mustangs and trucks. What they've got lefty to sell is nostalgia. Expect to see lots of overly sentimental ICE ads like those of Subaru.
RobStark
Well-Known Member
Ford brand will market zero sedans in the USA, ICE or BEV. Mustang is a sports coupe and Focus Active a five door hatchback.
Ford's coming 300 mile range 2020 BEV will be a Crossover. No word on whether it will be midsize or compact.
Ford's Lincoln will still make MKZ (tarted up Fusion) and Continental (tarted up Taurus).
Ford's product plan also includes a hybrid Mustang and F-150. No word if a plug will be an option for PHEV version.
Ford's coming 300 mile range 2020 BEV will be a Crossover. No word on whether it will be midsize or compact.
Ford's Lincoln will still make MKZ (tarted up Fusion) and Continental (tarted up Taurus).
Ford's product plan also includes a hybrid Mustang and F-150. No word if a plug will be an option for PHEV version.
Absolutely, and in the flip side, Ford needs to build a BEV truck that obsoletes their current truck portfolio before Tesla does. I don't think a hybrid F-150 is going to cut it. If a BEV truck owner really needed a backup generator, he'd just throw one in the back or maybe the frunk.
As battery cost falls bellow $100/kWh, a permanent range extender ICE will compete for space and weight with cheaper battery range extension. For example, why add a $3000 engine when for that cost, space and weight, you could add more than 100 miles of battery range which would also enhance the power, charge time and longevity of the battery and save more money on fuel? If you still had a compelling need for ICE, you'd probably would just prefer an ICE truck. Basically as the cost of batteries go down, you either go BEV or ICE.
Since the F150 apparently generates 50% or more of Ford’s profit, the innovators’ dilemma would seem to come into play with more than its usual force. At the time Tesla is ready to introduce a Pickup (~2021-2022) a BEV F-150 (or equivalent) would be one of the most challenging vehicles to pull off due to the heavy battery demands. Tesla’s experience with the Semi and superior battery technology should give it a huge leg up on performance and cost. Ford will have the advantage of brand loyalty among pickup buyers but will it be willing to take a big hit on profits of its most important product to shift customers to BEVs? I don’t think it will be in any hurry to do this given the drastic impact it could have on the bottom line, especially with dividend craving shareholders who may not be as patient as Tesla’s more growth-oriented investors.
Ironically, since it is discontinuing most of its car models in North America Ford may find it easier to introduce BEV cars than pickups, even leaving aside the technical challenges of a BEV pickup, since it won’t cannibalize its existing business and could add to the bottom line, even if modestly at first. But since Ford just shed much of its car business to increase profitability, it is not obvious that they’ll make a hard course change with an aggressive, high volume BEV car program. I doubt they will anytime soon, except perhaps in countries where government mandates require it.
Bottom line: I personally am not counting on Ford being at the front of the line with compelling BEV pickups (or truck-based SUVs). I think it is likely that Tesla will have to do most of the heavy lifting and force the rest of the industry to switch or lose their pickup and SUV customers. In other words, a repeat of the Semi, where the incumbents don’t seem up to the task of building a compelling long-distance hauler any time soon, leaving the field wide open when Tesla enters the market.
dc_h
Active Member
Limited investment in new ice vehicles is smart. Same thing we’re saying for new oil. Maximize profit, minimize investment and pull out as margins decline. The more proactive the industry is, the more the door opens for Tesla. Execution remains Tesla’s primary challenge. Flawless execution could allow 60% YOY growth with little or no cap raise. More production stalls like the 3 delay and could imperil the company, or at least cause unneeded dilution.
Regarding trains, could Tesla build a few hundred semi trucks without a formal production line? Not quite bespoke, but stamped at their site in Michigan and maybe developed with more additive manufacturing than a full speed production line would allow? It would be interesting if they could start moving to platooning this year or early 2019 and really highlight the value and eliminate the bottleneck of the train system.
I think a good hybrid will be fine, even desirable for a while for some. For example some people might like the flexibility of being able to plug in and use an engine (I was thinking about getting that Outlander Hybrid and wondering how often I'd forget to plug it in, but that wouldn't be a big deal since it still has a small engine). I would like a good hybrid f-150, in the absence of a good bev one. But yeah, long-term it's hard to imagine a hybrid competing with a bev, they will work better and be cheaper to operate in most cases. That will be the big thing, when people start buying the bev not because it works better or environmental reasons, but because it's cheaper. For example a lot of people over the next year or two are going to be looking for a new Toyota Camry or something, and realize that it would be cheaper for them to buy a model 3.
ValueAnalyst
Closed
It doesn't seem likely, at least to me, that Ford will see 2020. High degree of operating leverage cuts both ways.
RobStark
Well-Known Member
I think it is 99.99% likely Ford survives 19 more months.
You complain about free markets being disturbed? How about 7.500$ for every Tesla bought? Pure Hypocrisy
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