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timbop

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I agree that gas prices will go up post coveted, to about where they were a year ago.

Fewer ice cars means lower gas prices, ceteris paribus.
Over the next 5 years BEVs will not make a dent, so gas prices will at the least go back to where they were. In the long run, of course that will change and there will be disruption in the oil industry. The infrastructure, development projects, and overhead aren't going to decrease despite demand. In fact, now that the fracking industry is collapsing and smaller players being bought up, the bigger companies will have more of a monopoly. All of the infrastructure cost amortized over fewer customers combined with collusion/monopolistic behaviors at the top will ensure prices do not drop significantly. Just like new industries have to reach a critical mass before prices suddenly drop due to economies of scale, the reverse is also true. As gas stations close and new drilling projects get cancelled/go unfunded, the supply will decline more quickly than the demand.
 

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Over the next 5 years BEVs will not make a dent, so gas prices will at the least go back to where they were. In the long run, of course that will change and there will be disruption in the oil industry. The infrastructure, development projects, and overhead aren't going to decrease despite demand. In fact, now that the fracking industry is collapsing and smaller players being bought up, the bigger companies will have more of a monopoly. All of the infrastructure cost amortized over fewer customers combined with collusion/monopolistic behaviors at the top will ensure prices do not drop significantly. Just like new industries have to reach a critical mass before prices suddenly drop due to economies of scale, the reverse is also true. As gas stations close and new drilling projects get cancelled/go unfunded, the supply will decline more quickly than the demand.
If prices go up won't that mean that more suppliers will under the marketplace? Or at least that existing suppliers will produce more?

I also think you're wrong that electric vehicles won't make a dent. They won't make a dent in the next two years, but after 10 years they will be making a significant dent.
 

timbop

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If prices go up won't that mean that more suppliers will under the marketplace?
Not necessarily because the cost of entry will be prohibitively high given the demand.

Or at least that existing suppliers will produce more?
I don't think so. Oil wells have a finite lifetime directly proportional to their usage rate. If a small group of suppliers can collude to sell less for the same money they will - because the cost to extract, refine, and ship that quantity will be less. It also means they can delay having to open new drill sites, significantly saving expenses. OPEC's historical success highlights how effective collusion is when the group is small enough, and for sure consolidation will continue.

I also think you're wrong that electric vehicles won't make a dent. They won't make a dent in the next two years, but after 10 years they will be making a significant dent.
In 10 years, absolutely. However, for the next 5 years or so battery capability and supply will be a constraint. The rosy projections by manufacturers for BEVs haven't sufficiently addressed the supply problem, which is not only in shortage of manufacturing but also raw materials. It will also be at least 3 or 4 years before the next generation of batteries with 400 - 500 mile range and sub 20 minute charging become commercially viable. Without that, BEVs are still too much of a tough sell to the average car buyer.
 

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Not necessarily because the cost of entry will be prohibitively high given the demand.


I don't think so. Oil wells have a finite lifetime directly proportional to their usage rate. If a small group of suppliers can collude to sell less for the same money they will - because the cost to extract, refine, and ship that quantity will be less. It also means they can delay having to open new drill sites, significantly saving expenses. OPEC's historical success highlights how effective collusion is when the group is small enough, and for sure consolidation will continue.



In 10 years, absolutely. However, for the next 5 years or so battery capability and supply will be a constraint. The rosy projections by manufacturers for BEVs haven't sufficiently addressed the supply problem, which is not only in shortage of manufacturing but also raw materials. It will also be at least 3 or 4 years before the next generation of batteries with 400 - 500 mile range and sub 20 minute charging become commercially viable. Without that, BEVs are still too much of a tough sell to the average car buyer.

If the economy takes off super fast Then oil prices will increase. If the economy doesn't take off really fast then oil prices won't increase that much. It's pretty much that simple. So when you're telling the oil prices are going to increase dramatically you're saying that you're very optimistic about the world economy going forward.
 

timbop

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If the economy takes off super fast Then oil prices will increase. If the economy doesn't take off really fast then oil prices won't increase that much. It's pretty much that simple. So when you're telling the oil prices are going to increase dramatically you're saying that you're very optimistic about the world economy going forward.
No, that is not what I said at all, nor do I agree with that simple assessment. Prices of some things can collapse in a "strong economy", and prices of others can skyrocket in bad times. It is not just supply and demand, nor is it as simple as a rising tide always lifting all boats. With the collapse of fracking, natural gas supply will take a hit. Renewables are continuing to get cheaper. So, will electricity prices go up or down? The answer is "it depends"; a simple adage won't do.

Look, I am not going to argue with you about this. Pick your own expectations for the price of a gallon of gas and do your own calculations.
 

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There is one negative to this that I can think of... chargers could be tied up longer, making it harder to get into one. The old per-minute pricing made it progressively expensive to charge past 60%... 70%... 80%... as the charge curve slowed. It was more likely people would move on after 20-30 minutes because of that progressive cost penalty.

But now, that cost disincentive is lifted. People will be more willing to charge deeper, perhaps walking down the street for a 60-minute sit-down meal instead of a 20-minute take-out burger. The 40c/minute idle fee still kicks in if they wait too long, but that has a 10-minute grace period after reaching 100% SOC. That could be 30 minutes longer than the normal 80% stopping point.
I doubt many users do that math (just because people in general suck at math) and they just sat there until the car said it was done and then complained (like that one Niro (?) rant on here) about the per kWh price.

Down the road, they could simply force all sessions to end at 80% (their charger UI already suggests this is what will happen, but it keeps charging past 80% to your car's set limit), and make you consciously start another session (since there's no per-session fee even for guests) to go past 80%, to nudge users harder that 80% is for most situations enough.

I'd say of the 150ish now Supercharges I've done, 100 at least I left at 50-60% SoC, you just need enough to get to the next charge, not 80%, that's just arbitrary.

The Mach-E should be good at telling you when to unplug and move on to save time on long trips, if that UI image that was on here a few weeks ago is anything to go by.
 

ChasingCoral

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OK, so we'll do the math for ICE at a little better MPG, but we also have to be realistic about gas prices going forward - especially since there are going to be fewer suppliers in the future. Regardless, the fuel cost is still roughly on par between the EA rates and ICE:

$2.50 / 35mi = $.0714/mi
$3.00 / 35 = $.0857/mi

For a relatively long trip of 1000 miles, at $.091/mi the MME will cost $91 and an efficient ICE will be in the range of $71 to $85. That's a pretty small difference on that 1000 mile trip, and you did it in a car that did most of the driving. That's a pretty good deal.

Oh, and you contributed far less CO2 to the atmosphere to boot.
The real punchline here is that DCFC will cost about the same as filling an ICE and home charging is much cheaper and more convenient. I’ll take that.
 

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No, that is not what I said at all, nor do I agree with that simple assessment. Prices of some things can collapse in a "strong economy", and prices of others can skyrocket in bad times. It is not just supply and demand, nor is it as simple as a rising tide always lifting all boats. With the collapse of fracking, natural gas supply will take a hit. Renewables are continuing to get cheaper. So, will electricity prices go up or down? The answer is "it depends"; a simple adage won't do.

Look, I am not going to argue with you about this. Pick your own expectations for the price of a gallon of gas and do your own calculations.

You're the one claiming to know the future. It seems to me that if the prices of substitutes for gasoline (renewables) decline, then that should put downward pressure on the price of gasoline.

I'm not saying what will happen to the price of gasoline, I'm only saying that you can't predict it. If you could then you would be making a ton of money in the futures markets.
 

dbsb3233

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I think both of you guys are mostly right. The oil market is very complex, especially since it's a true worldwide market with a mix of free market players, nationalized oil companies run by governments, plus a sizeable cartel in OPEC. It uses commodity pricing (outside of the handful of counties that price-set their own, often communist/socialist countries) on a worldwide scale, which is free market. But many of the factors that influence that price are artificial, like OPEC supply collusion, geopolitical strife, government regulations, etc. As well as things like weather, shipping, refinery capacity, etc. And of course shifting demand.

Then remember that production oil reservoirs and production facilities in place can have a 20-30 year lifespan. And 5-10 before that to explore for it and test drill. It's a long-horizon game. That's why oil price cycles tend to be quite long. The booms and busts can be as short as a year or as long as 15 years.

Many of the factors cited are true, but they're also only part of the puzzle. Personally I think 2019 may prove to be the worldwide peak for oil demand though. COVID and the significant growth of BEVs/PHEVs about to launch should start reducing demand gradually from here. And that will likely depress pricing for the early half of this decade. There will be a lack of investment in new wells, but plenty of existing one ones to produce for a while. In other words, oversupply (and a "bust" period for the oil industry). But eventually the existing reservoirs will depleat and those wells shut-in. And supply will drop to the point of getting tight with demand, and the price will rise again. Whether that's in 2 years or 5 or 10 is anyone's guess though. There's 100 factors pushing and pulling all the time.

My 2 cents, anyway.
 

MerryBrown

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I think both of you guys are mostly right. The oil market is very complex, especially since it's a true worldwide market with a mix of free market players, nationalized oil companies run by governments, plus a sizeable cartel in OPEC. It uses commodity pricing (outside of the handful of counties that price-set their own, often communist/socialist countries) on a worldwide scale, which is free market. But many of the factors that influence that price are artificial, like OPEC supply collusion, geopolitical strife, government regulations, etc. As well as things like weather, shipping, refinery capacity, etc. And of course shifting demand.

Then remember that production oil reservoirs and production facilities in place can have a 20-30 year lifespan. And 5-10 before that to explore for it and test drill. It's a long-horizon game. That's why oil price cycles tend to be quite long. The booms and busts can be as short as a year or as long as 15 years.

Many of the factors cited are true, but they're also only part of the puzzle. Personally I think 2019 may prove to be the worldwide peak for oil demand though. COVID and the significant growth of BEVs/PHEVs about to launch should start reducing demand gradually from here. And that will likely depress pricing for the early half of this decade. There will be a lack of investment in new wells, but plenty of existing one ones to produce for a while. In other words, oversupply (and a "bust" period for the oil industry). But eventually the existing reservoirs will depleat and those wells shut-in. And supply will drop to the point of getting tight with demand, and the price will rise again. Whether that's in 2 years or 5 or 10 is anyone's guess though. There's 100 factors pushing and pulling all the time.

My 2 cents, anyway.
I do wonder how the future will go. On the west coast I believe there will be a faster adoption of BEV's. Hopefully that will also mean an increase in charging stations. With the current fires I would hope it would alert people to to fact that we need to stop using fossil fuels.
 

timbop

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Well, it seems that the new EA chargers at the Walmart in Richmond aren't the improvement one would hope for. Here's a comment from a user just yesterday:

“I was excited to try this location for first time after it’s been reopened since they replaced the charging units with a new ones. The first attempt started well however after 5 minutes stall #7 just stopped charging without any reason and without displaying any error. I tried to initiate another session which failed immediately. I moved to charging unit #3. It starts charging well. However after 12 minutes this charging unit also stopped without any reason and without displaying any error. It seems the new charging units from different brand behave exactly the same way as the previous charging units that been replaced just recently. I will post a video on my YouTube channel EV addicted.”
 

ClaudeMach-E

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I think both of you guys are mostly right. The oil market is very complex, especially since it's a true worldwide market with a mix of free market players, nationalized oil companies run by governments, plus a sizeable cartel in OPEC. It uses commodity pricing (outside of the handful of counties that price-set their own, often communist/socialist countries) on a worldwide scale, which is free market. But many of the factors that influence that price are artificial, like OPEC supply collusion, geopolitical strife, government regulations, etc. As well as things like weather, shipping, refinery capacity, etc. And of course shifting demand.

Then remember that production oil reservoirs and production facilities in place can have a 20-30 year lifespan. And 5-10 before that to explore for it and test drill. It's a long-horizon game. That's why oil price cycles tend to be quite long. The booms and busts can be as short as a year or as long as 15 years.

Many of the factors cited are true, but they're also only part of the puzzle. Personally I think 2019 may prove to be the worldwide peak for oil demand though. COVID and the significant growth of BEVs/PHEVs about to launch should start reducing demand gradually from here. And that will likely depress pricing for the early half of this decade. There will be a lack of investment in new wells, but plenty of existing one ones to produce for a while. In other words, oversupply (and a "bust" period for the oil industry). But eventually the existing reservoirs will depleat and those wells shut-in. And supply will drop to the point of getting tight with demand, and the price will rise again. Whether that's in 2 years or 5 or 10 is anyone's guess though. There's 100 factors pushing and pulling all the time.

My 2 cents, anyway.
You can had that big investment firm are now getting away from the oil industry.
 

dbsb3233

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You can had that big investment firm are now getting away from the oil industry.
Yes, every time there's a "bust" cycle, investors jump ship and drive the stock prices down. Same boom-bust cycle that's been happening in the industry for a century. And will continue to happen for another century, because even though the growth of BEVs will gradually chip away at demand, oil will still be needed for many purposes from jet fuel to asphalt to chemicals to pharmaceuticals to plastic to gasoline that will still be used quite a bit for decades (just not as much).
 

ChasingCoral

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Yes, every time there's a "bust" cycle, investors jump ship and drive the stock prices down. Same boom-bust cycle that's been happening in the industry for a century. And will continue to happen for another century, because even though the growth of BEVs will gradually chip away at demand, oil will still be needed for many purposes from jet fuel to asphalt to chemicals to pharmaceuticals to plastic to gasoline that will still be used quite a bit for decades (just not as much).
Much better uses for oil than as an automotive transportation fuel.
 



 










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