# Time to sell oil, auto related stocks? Buy EV as next car?



## agent99 (Sep 11, 2013)

Saw this entertaining but somewhat alarming video on future of automobile industry and in turn the oil producing industry.

I can see this happening in Europe and other developed countries, then in USA, but maybe China and 3rd world may lag? What will happen to oil-sands - It's oil is already being sold at distressed prices. As demand drops even more, maybe production in oil-sands will no longer be economic? Getting the oil to the coast for export may help? How will our stalwart pipeline companies do when US doesn't need our oil?


----------



## AltaRed (Jun 8, 2009)

A potentially plausible* scenario in Europe and North America perhaps, but it will be harder to displace ICE's than suggested. Oil prices will soften to keep ICE's competitive and electrical costs will have to increase significantly to fund the generating plants, and transmission and distribution systems to power EVs. Discussion on the latter issue has barely begun. Outside of developed countries, few countries have the capacity to fund EV infrastructure on a huge scale. Thus economic convergence will take longer than presented.

Also, oil demand shown on the graph is, I think, for transportation only. Actual global demand for oil is currently ~100 Mbbls/day, a lot higher than the ~60 Mbbls/day on the graph. More oil is being used every day for non-transportation purposes. News of premature oil death are greatly exaggerated, but I agree global oil demand growth will likely stall by about 2030 and tip over. I do agree it doesn't take more than 1-2 Mbbls per day of mis-match between supply and demand to make prices either soar, or drop considerably.

* I might argue I am in this period of uncertainty at the moment. I am, or will be, in the market for a replacement auto as early as 2019, but I plan on holding off to see if, within 2-3 years, EVs have matured to the point where there are many alternatives, reliability from established manufacturers, profound increase in super-charging stations, and more range. Which way I go will depend on when I actually need to replace my vehicle and what is out there at the time.


----------



## hfp75 (Mar 15, 2018)

The USA will always take a discounted product that they can in turn resell at a large margin. That doesn't worry me. If demand drops enough the price will also drop. That might be a real concern. I think it will take decades to cycle out all these vehicles - and today if you look at the auto dealers lot, its 95%+ gas/diesel, so we are still good. Plus developing infrastructure all over for electric will also take time. 

Plus gas/diesel is such a portable energy its unreal, there will always be demand.... 

Even if electric car sales start to increase, where does the electricity come from ? Uranium, natural gas and some coal...... energy always comes from somewhere. Fossil fuels will still dominate, just might not be gas.... the price of natural gas will rise as demand increases. 

I would wonder, if cars all switched over to electricity, what would happen to the electricity prices ? companies selling natural gas and Utilities might be the next boom.

Nat gas (LNG) is so cheap and plentiful that it still might be cheap even if we are using 5x as much. My wife works in O&G and her company has a NG/LNG site in northern BC that has enough supply to fuel all of Canada for 10+ years but because the price is so low and there is no infrastructure, they just capped it off and it gets to sit dormant.

The real concern is that our whole economy will shudder if oil demand drops off. We are such an export driven economy that we will take it square on the nose. That wont be good for any of us.

All the third world countries that 95% rely on oil for their whole economy will implode... all the despot dictators will run these terrible bankrupt countries... I could see terrorism increasing..... and humanity suffering....


----------



## like_to_retire (Oct 9, 2016)

AltaRed said:


> * I might argue I am in this period of uncertainty at the moment. I am, or will be, in the market for a replacement auto as early as 2019, but I plan on holding off to see if, within 2-3 years, EVs have matured to the point where there are many alternatives, reliability from established manufacturers, profound increase in super-charging stations, and more range. Which way I go will depend on when I actually need to replace my vehicle and what is out there at the time.


I'm in the same mindset. I usually replace my car every 5 years, but now I am questioning whether the next one will be electric or should I wait until the one after that. Hybrids are goofy, but if full electric makes sense for the next car I would go that route. Then I think I should maybe wait and get another gas vehicle this time, hoping that the electrics will have come to fruition after that.

ltr


----------



## AltaRed (Jun 8, 2009)

like_to_retire said:


> I'm in the same mindset. I usually replace my car every 5 years, but now I am questioning whether the next one will be electric or should I wait until the one after that. Hybrids are goofy, but if full electric makes sense for the next car I would go that route. Then I think I should maybe wait and get another gas vehicle this time, hoping that the electrics will have come to fruition after that.


I typically replace every 10-12 years and my current vehicle is 12.5 years. If my cycle was 5 years from now, I am pretty certain a good EV (not hybrid*) alternative would be there. Much less confident 2-3 years from now. Odds are 70/30, I will have another ICE given most plans are overly ambitious.

* hybrid = impotent mule - worst of all worlds. For the most part, 2 drivetrains except for those where the ICE simply powers a generator.


----------



## agent99 (Sep 11, 2013)

If we set out at 8am and drive South in our new EV with range of 450+ km, we could stop for lunch and recharge. But unless we find and have on-board capability of a Tesla Supercharger, we would have to stay overnight just to get recharged. 
Assuming we do have Supercharger and get recharged in an hour or so, we continue for another 4 or 5 hours and get to a Hampton Inn or equivalent for overnight stay (we have now travelled 900km) They have 80 rooms, all occupied. So 80 cars and they are all EVs. Will they have charging stations at every parking place? And what will they charge for a recharge? 

Another thought. On a major highway like the 401 in Ontario. How many cars are filling up at any one time? Taking maybe 10 min per fill. Fast Forward to future with almost all EVs with similar range to gas cars. But they will need an hour to "refill". Will need to get our Operations Research team to study this!

Anyone seen a model of what an all-EV system and country would look like? 

Too many questions. But nevertheless, I would like to own an EV, at least for use around town.


----------



## AltaRed (Jun 8, 2009)

No one has seriously worked out re-charging logistics nor distribution, although re-charging logistics could happen quickly if there is money to be made at it. Entrepreneurs will quickly grab business opportunities. The grid is a completely different matter.


----------



## andrewf (Mar 1, 2010)

agent99 said:


> Saw this entertaining but somewhat alarming video on future of automobile industry and in turn the oil producing industry.
> 
> I can see this happening in Europe and other developed countries, then in USA, but maybe China and 3rd world may lag? What will happen to oil-sands - It's oil is already being sold at distressed prices. As demand drops even more, maybe production in oil-sands will no longer be economic? Getting the oil to the coast for export may help? How ill our stalwart pipeline companies do when US doesn't need our oil?


China is adopting electric cars faster than anyone. Low range electrics cars will pretty rapidly be cheaper than ICE to own and operate.


----------



## andrewf (Mar 1, 2010)

AltaRed said:


> No one has seriously worked out re-charging logistics nor distribution, although re-charging logistics could happen quickly if there is money to be made at it. Entrepreneurs will quickly grab business opportunities. The grid is a completely different matter.


I don't think charging will be all that bad. Most EV owners top off a bit overnight, when demand is low. Peak on-the-go recharging will be holiday weekends. Holiday weekends, many businesses are closed and demand is lower. So I don't expect generation or distribution to be that much of a challenge, except maybe on really cold nights in Quebec where they use a lot of electric heat. The charging is going to be a challenge on holiday weekends when people roadtrip. Companies like Tesla are building an ecosystem by putting in charging stations with relatively low utilization to meet these peaks. The economics will be interesting over time as all new Teslas do not have unlimited free supercharging anymore. That opens the door to some price signalling for rapid charging. It will be a lot easier to build destination chargers at places like malls and supermarkets where people might kill an hour or two rather than trying to get 60-70% charge in <30 minutes like supercharger can do. Tesla had signs at some California superchargers asking people to limit charging sessions to 40 minutes, as the rate of charge slows down as the battery becomes full.


----------



## AltaRed (Jun 8, 2009)

Maybe. Charging behaviour in Norway https://utilityweek.co.uk/charging-behaviour-evidence-norway/ Important to learn and adjust to behaviours or change pricing on demand algorithms. 

Norway grid problems and potential solutions including stationary battery storage and changing consumer behaviours, e.g. demand peak pricing. https://evobsession.com/norwegian-grid-struggling-keep-growing-ev-fleet/

North America will be a much harder nut to crack. Firstly, North Americans and especially Americans are not nearly as culturally and institutionally disciplined as Norwegians, nor do we/Americans have nationally controlled grids.


----------



## agent99 (Sep 11, 2013)

Once all those EVs are trying to charge, we may see something like this:


----------



## lonewolf :) (Sep 13, 2016)

hfp75 said:


> Nat gas (LNG) is so cheap and plentiful that it still might be cheap even if we are using 5x as much. My wife works in O&G and her company has a NG/LNG site in northern BC that has enough supply to fuel all of Canada for 10+ years but because the price is so low and there is no infrastructure, they just capped it off and it gets to sit dormant.
> 
> .


 Korea is ordering 140 LNG ships


----------



## l1quidfinance (Mar 17, 2017)

Do people not believe that the hydrogen fuel cell will be the solution to the EV?

What are the negatives for that?

I would consider and EV for the commute and have been looking. I like the idea of Phevs but the battery only range is typically useless


----------



## AltaRed (Jun 8, 2009)

Hydrogen is too expensive to produce and distribute, and too complex for especially a bucket of bolts (and plastic and such). Imagine some low life not maintaining his hydrogen fueled car (bomb) properly and there is a leak.


----------



## agent99 (Sep 11, 2013)

AltaRed said:


> Hydrogen is too expensive to produce and distribute, and too complex for especially a bucket of bolts (and plastic and such). Imagine some low life not maintaining his hydrogen fueled car (bomb) properly and there is a leak.


I agree that it would not be easy to develop a safe distribution system for hydrogen gas. It needs to be delivered and stored at something like 8000psi. Not something I would like in my fuel tank! 
However, there is the possibility of bonding hydrogen to metal hydrides in a liquid form that can be stored at atmospheric pressure in tanks, just like gasoline. Waste heat from the engine can be used to release the hydrogen. It can then be used in fuel cells or even in modified ICEs. There is a company called Hy Tech Power (and likely others) working on such systems. But won't happen overnight.


----------



## doctrine (Sep 30, 2011)

To truly go EV, there will have to be massive, massive investment in power generation. Offloading to non-peak hours is a temporary measure only. BC's 2040 plan, which is for 100% of vehicles sold must be EV as of 2040, suggests up to 100% growth in electrical production will be required. BC probably built its last significant hydro electric dam (Site C), so it's not clear where the electricity will come from. It's going to require a lot of capital investment, so I would expect power rates will have to rise significantly to justify the investment and attract capital.


----------



## AltaRed (Jun 8, 2009)

I provided a couple of links in an earlier post about how to mitigate peak usage by EV chargers. Still, a ton of investment will be required. The bigger problem in my mind is still the unreliability of solar and wind which was the subject of a different thread, e.g. generation problems in Germany. Still more investment. May our electrical prices will double. Who knows.


----------



## doctrine (Sep 30, 2011)

When EV is mainstream, electricity prices will be higher to build that grid. As well, gasoline taxes will have to be replaced, not sure whether governments will download that onto electrical prices as well, but it is a strong possibility. Current EV drivers get a tax discount for driving on the roads by avoiding gasoline taxes, but that will only work up to a certain % of drivers.


----------



## lonewolf :) (Sep 13, 2016)

The market will eventually decide the best form of energy. Come on man, how much longer do you think the public can be fooled into spending billions of dollars to control the temp of the earth. The politicians with their tax grab will @ some point lose against market forces. The most practical form of energy will eventually win.


----------



## AltaRed (Jun 8, 2009)

It depends on the willingness of governments to legislate ICEs out of existence, or to a minimal percentage of the market, just like CAFE mandates.


----------



## OhGreatGuru (May 24, 2009)

To go back to the original question in the Header:

Time to Sell Oil? No. The world is not going to go off oil for a long time. We may see a lowering of demand for automotive fuel in the foreseeable future, but not oil generally. Ships, trains, planes, and trucks are going to be running on oil (or derivatives thereof) for a long time. Petroleum is the raw material of our entire petrochemical industry that manufactures plastics, textiles, and other materials that have nothing to do with transportation fuel. 

Sell Auto-Related Stocks? No. Who else do you think is going to manufacture the electric and alternate-fuel cars of the future?

Buy EV for next car? Many posters have already noted it is hard to say. The economics and practicality are highly variable depending on where you live and how you intend to use your vehicle. In Canada, unless you want a vehicle only for urban commuting, I would suggest a hybrid is as far as you should go at the present time. And even a hybrid may be more a matter of philosophical commitment than economic cost-benefit analysis. In Ontario about 50% of our power comes from nuclear power stations: so one's "environmentally responsible choice" to go electric means more radioactive waste if it happens on a large scale.


----------



## MrBlackhill (Jun 10, 2020)

I'm moving this thread up as I was about to open a new thread.

Just read an article about hydrogen : L’hydrogène, le nouvel eldorado énergétique au Canada?

It's in French though. Let me find you something similar in English : https://www.cbc.ca/news/business/canada-national-hydrogen-strategy-1.5713137

It's basically saying hydrogen could meet 24-30 percent of the world's energy demand by 2050. 

Germany will invest over 9 billions in the hydrogen sector in order to become the number one producer. 

Cars may become all electric, but heavy vehicles could be fueled by hydrogen.

Specialists are being cautious though, as there's still many challenges to come.


----------



## agent99 (Sep 11, 2013)

MrBlackhill said:


> Germany will invest over 9 billions in the hydrogen sector in order to become the number one producer.


Hopefully not for Zeppelins!

By the way, Chrome translates that first Radio-Canada French link to English. Quite interesting.

PS: I had forgotten that this thread existed!


----------

