Guest Aeuhhh???? by David Middleton
Economics
Oil Needs to Fall Below $20 to Compete With Green AlternativesBy Mathew Carr
August 5, 2019, 4:40 AM CDT Updated on August 5, 2019, 9:18 AM CDTWind and solar power can produce seven times more useful energy for cars, dollar for dollar, than gasoline with oil prices near current levels, according to BNP Paribas SA.
Oil will have fall to $9-$10 a barrel in the long-term in order for gasoline cars to remain competitive with clean-powered electric vehicles, and to $17-$19 a barrel for diesel, Mark Lewis, global head of sustainability research at BNP’s asset management unit, said in a research report. U.S. benchmark crude was trading at about $55 in New York on Monday.
“Our analysis leads to a very stark conclusion for the oil industry: for the same capital outlay today, wind and solar energy will already produce much more useful energy for EVs than will oil purchased on the spot market,” Lewis said. “These are stunning numbers, and they suggest that the economics of renewables in tandem with EVs are set to become irresistible over the next decade.”Lewis coined the term “energy return on capital invested” to explain the economics of road transport. It’s a measure of the money spent on oil and renewables and the differential in their net energy produced when used to provide mobility, he said.
[…]
Bloomberg
Oil Needs to Fall Below $20 to Compete With Green Alternatives…
Renewables must be so feeble, they now need two fake energy acronyms to make them viable.
First we had Energy Returned on Energy Invested (EROEI) and now we have Energy Returned on Capital Invested (EROCI)…
Stark raving mad numbers
The EROCI chart is comparing the capital costs of building offshore wind and solar PV power plants to the sales price of crude oil. It doesn’t get much more apples and oranges than this. Based on this bass-ackwards math, $9/bbl oil is worth more than $60/bbl oil. I only minored in math and spent most of the last 40 years involved in economic geology… But that is just fracking mental.
“Our analysis leads to a very stark conclusion for the oil industry: for the same capital outlay today, wind and solar energy will already produce much more useful energy for EVs than will oil purchased on the spot market.”
Mark Lewis, BNP Paribas, global head of sustainability research, BA in Spanish & German, MPhil in Latin American Studies, MA in German – LinkedIn
No business makes an investment decision based on “energy return.” Returns are denominated in $$$ or some other form of currency.
If his point is that oil would have to drop to $9/bbl for gasoline prices to be low enough to make ICE vehicles less expensive to drive than EV’s… We already have a metric for this concept: Miles per gallon equivalent (MPGe). EV’s are less expensive to drive, at least on paper… Yet the Ford F-Series pickup truck outsells all makes and models of EV’s combined in these occasionally United States… by a wide margin.
To be fair, the article does go on to acknowledge that oil has a YUGE scale factor advantage over unicorn dust… But the unicorn dust is actually a lot more expensive than indicated in Señor (or is it Herr?) Lewis’ EROCI graph.
Why is there such an incessant need for these people to make up fake metrics, fake numbers and declare an end to reality? I think this explains the problem: BNP Paribas, “The bank for a changing world.”
In the meantime, reality marches on…
Hat tip to “Carl” for the WUWT tip submission.
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The economics of wind is even worse, as it does not price the required spinning backup as a cost of wind.
Yes, that really puzzles me. Wind operates economically about 20% of the time, so the easiest costing method is to multiply the cost per unit of wind generated electricity by a factor of 5.
It’s probably a little worse than that, as the spinning backup has to remain spinning even when the wind is in the Goldilocks zone for the wind turbines. It would be idling, but would still need to be at a point where it could immediately be switched over.
There would also be the energy required to spin the wind turbine blades during no wind situations. Otherwise, the bearings can develop hard spots and you get premature bearing failure. Takes a reasonable amount of energy to spin a turbine that could be several hundred feet in diameter.
Another great guest reality check – thank you Mr., Middleton, your posts are a pleasure to read!!
$9 to $10/bbl for oil?
As much as I would dearly love to see the prices at the pump drop to what they were in the 1960s ($0.19 to $.025/gallon), the lack of reality in that demand by the Greenbeaners is stunning.
Actually, gasoline prices have not changed since the 1960s. Something that cost $0.25 in 1960 now costs $2.15 (2018, last yearly data – so a bit more).
Now, gasoline costs more than $2.15 a gallon in a lot of places today – every bit of the excess, and more, is accounted for by increased excise taxes (Federal and State both).
When one looks closely at the 1973 oil embargo, the reason was almost purely economic, not political. Prices for crude had not kept up with inflation, leaving OPEC producers with a diminishing real income per barrel. In 1973, they had sufficient control of the supply (through nationalization of Western oil company assets in their countries, and a lack of significant new supplies coming on line in those countries) that they could force a massive price spike.
The supposed political reason, the 1973 Arab-Israeli War, and the West’s response to aid Israel, was a perfect pretext for internal consumption, and useful idiots abroad. Many of the Arab “men on the street” were seriously impacted by the embargo – but could be convinced to bear up under the pain by making the issue “evil Jews,” instead of “protecting the cash flow of the Princes.”
In the 1950s, a gallon of gas cost two US silver dimes. Those same two dimes will buy a gallon of gas, today.
True! A few years ago, I took advantage of one of the periodic price spikes and sold what silver coins I had at the time. Around $10 “face value” – it bought two weeks of groceries for a family of five (two teenagers at the time). I don’t remember whether I used some of the proceeds for gas or not, but probably I did.
A recent analysis of wind turbine costs indicated that he lifespan of large turbines is barely half that promised. Since the build/erection costs dominate the cost of a turbine’s power output. this means the real costs are essentially twice as expensive as promised (and reported) costs. There is also the cost of backup power required. In terms of gas powered fuel costs versus electric fuel costs, at 15 cents per kWhr, a 4000 pound electric car can travel realistically 2 1/2 miles per kWhr or 6 cents per mile. But electric rate can also be as high as 35 cents per kWhr (San Diego, Hawaii, etc) or 14 cents per mile. But that doesn’t include road taxes, which at present most EV drivers do not pay, while gas powered cars do pay. At $2 per gallon and 20 MPG, a gas powered car pays less that 7 cents per mile for the fuel only.
Just drove 2500 miles in a 1 year old 1 ton crew cab standard bed diesel PU and averaged 19.7 mpg going 5 to 7 mph over the posted speed limit. (Averaged around 75 mph) Mostly highway driving with 200 miles or so around town. I would have gotten better mileage but I filled up when near empty at the lowest priced station on I 84 in Oregon. (Gasbuddy) Didn’t notice until I got 25 gallons in that it was type 5 bio-diesel. After returning to the interstate my instantaneous mpg dropped from around 21 mpg to just over 16 mpg, and stayed that low until I refilled the tank with diesel at Costco in Washington from a pump that stated “may contain 5% bio-diesel”. After that refill my mileage went up, but I could not judge how much since I was driving in town. Once back on Interstate my instantaneous mileage was still lower than earlier in the trip before the bio-diesel.
Once I refilled at a Walmart in Idaho with normal #2, again with not much left in the tank, my mileage approved about a mile per gallon for the remainder of the trip. I probably would have beat 20 mpg without that bio-diesel partial fill up. 36 gallon tank and refilled the tank 4 times including the partial 25 gallons after starting with 150 miles off of the first tank, and still drove 200 miles more after completing the round trip before refilling again. Over 600 miles per fill up, 10 minutes to refill, than on the road again, try that with an electric vehicle.
The bio-diesel was about 20 cents cheaper than other stations nearby, but the 15% reduction in mpg was obviously not worth the difference. I had never seen #5 diesel before, I will watch for it in the future in crazy enviro states. I was always aware of the difference in mileage in my old gas truck when I filled up in Vegas with “oxygenated” gas (10% ethanol) and regular gas in Utah. Always less mileage and power with the 10% ethanol gas.
BTW as to comments on another thread on WUWT re improved economic efficiency and longevity, my old 2002 gas truck had 220,000 miles when I gave it away after 17 years of ownership, no engine work, about the same mpg and power as 20,000 miles in but I did need to replace the auto transmission. Lost 3rd gear, a known problem with that year that was corrected in later transmissions according to the shop who did the change out. It was replaced with a factory crate transmission after 180,000 miles. I gave it away a year ago and it is still running great. Does not burn oil, runs smoothly, starts right up even in COLD weather.
Solar – maximally gives about 27% of a 24 hour day worth of equivalent full-rate generation. Period.
It lasts for from 20 to 25 years. Period.
If one uses … 20 years, 5% interest, 2700 power-hours per year, $1.50 per installed watt, then it works out to 5.4¢/kWh for the electric power. By direct comparison, California gasoline at $3.25 a gallon, 10 kWh of motive power per gallon, comes in at 32.5¢/kWh. Some 5.8× more expensive.
BUT… again, “apples for apples”, in California without subsidies, power costs between 24¢/kWh and well over 28¢/kWh. Well … that makes gasoline only 1.3× more expensive than wall-plug power. The apples-to-apples bit is because both kinds of power are “fully distributed”, from “raw materials” to in-car use.
No, petrol isn’t particularly inefficient.
Now, coal, power stations, all that? Much depends on regulatory overhead. Much depends on pölïtical will. Its a different ballgame, for sure.
Just saying,
GoatGuy ✓
I pay 12¢/kWh for electricity and gasoline in Texas is around $2.40/gal. One gallon of regular gasoline is equivalent to about 33 kWh. That works out to $3.96 per gallon-equivalent of electricity.
Exactly. Gasoline is a cheaper source of energy than even cheap electricity. But, the motor is more efficient than the engine (little wasted heat).
It costs me 5 cents a mile to drive my PHEV on electrons, and 8 cents per mile as a hybrid, and 11 cents as a pure ICE, based on EPA numbers.
That is with 13 cents per KwH and 2.60 per gallon gas.
Now, since in every case introduction of solar/wind drives up electricity costs, my cost per mile is going to go up when I drive pure electrons.
My hybrid cost about 10,000 dollars more than a similar ICE (Thanks to the govt, I broke even on that). It will take a lot of driving at a cost savings of 3 cents per mile to equal 10,000 dollars (333,000 or so).
Plus there’s the fact that I can fill my gas tank in a bout 5 minutes at any gas station.
S L A P
Well you can at the moment. There are people who want to change that. Here in Australia we have the very ridiculous situation where the country has only 28 days of oil supply for all liquid fuels. For such a “smart and lucky” country it’s hard to believe we’re in this situation, but there are people who want exactly that and worse.
Exactly. You have to include the time costs of EVs in any calculation. Spending three to six hours waiting to complete your journey versus five minutes is a huge additional cost, and will come with huge additional in infrastructure costs.
You have to remember that close to half the cost of gasoline are the road use taxes. As soon as EVs get above a trivial level of market penetration, it will be worth government’s while to figure out a way to make EVs help pay for the roads they are using for free now.
But, but it’s only fair if they raise the electricity rates for EVERYONE cause you don’t know if the taxpayer is using their personal electrons for cooking or driving…
And if EVERYONE pays MORE then the entire cost is much less for those who should pay the actual road tax cause those who don’t drive will have to pick up the slack.
Now that”s fairness.
In the Once-Great-State of Washington, USA – Already planned, pilot programs pending:
http://www.ifiberone.com/columbia_basin/state-inching-closer-to-per-mile-gas-tax-system/article_a1120132-75cc-11e9-ad61-e34769971602.html
Regards,
MCR
Germany: electricity 0.33€/kWh (0.17€/kWh without taxes), diesel 1.22€/l – 0.114€/kWh (0.07€/kWh without taxes).
I once worked out that the cost of electricity for a vehicle would be a lot less than the cost of gasoline. Let’s suppose for a minute that’s actually true.
So, you have to save $19,000 in fuel before the electric vehicle pays for itself. Where I am right now, that’s about 15,000 liters of gas. That would take you better than 200,000 km. That, of course, is ignoring the cost of electricity. Also, you can’t ignore the cost of financing.
If you don’t drive a whole bunch, gas cars are still a better deal. On the other hand, my friend the delivery driver has a used Prius and it saves her a bundle. In my case, there’s no way an electric or hybrid makes sense.
David,
I agree with your numbers. Here in the UK an imperial gallon is basically 40 kWh of energy, this very neatly translates into i kWh/mile travelled in my 1.8 ltr diesel car, i.e. it does 40 MPG.
With that in mind I am intrigued to read the electric vehicles are lower cost than ICE because I pay £0.16/kWh for electricity. that equates to £6.40 for a gallon equivalent of energy and is more than the £5.90, I pay for a gallon of diesel. It is also worth noting 80% of the diesel fuel cost is Tax!!
Your diesel car performance is particularly crap. I get a long term average of 62 miles per imperial gallon which rises to 70 miles per gallon on long journeys say Frimley,Surrey to Great Yarmouth, Norfolk from my Ford Focus Euro 5 diesel.
Be happy for Texas prices, David.
I just paid $3.95/gal for 87 octane at a Chevron. That’s far NE California in Alturas so about 30 cents more than more central areas.
But an electric motorcycle won’t make the next 150 miles to Burns, Oregon, so what else would I do?
Near where i live, the gas price at the First Nations service station is usually about 60 cents cheaper, representing a goodly chuck of California’s tax highway robbery.
Doesn’t that $3.96 per gallon gas include a lot of state and local taxes? Are there equivalent taxed on the other?
The gallon-equivalent price doesn’t factor in taxes.
There is a pea under shell game going on in the article above.
“Wind and solar already produce much more useful energy for EVs”; a statement that is correct when one considers Wind and solar generate DC electricity.
I suspect Lewis’s figures are based upon energy generation at their sources without the energy losses caused by converting to AC and then back to DC.
In addition to Lewis purposely using apples to pineapples comparison while ignoring subsidies to renewables that add costs to fossil fuels.
I suspect he is also using name-plate capacity to figure the capital cost per kwh. We all know that wind and solar actually produce much less than that, on average, in the real world.
“Wind and solar power can produce seven times more useful energy for cars, dollar for dollar, than gasoline …”
I am not even sure what this sentence means. How do they define “useful”? Are they considering the costs (and loses) of transforming and moving the electricity from a wind turbine all the way into a car battery? Being able to drive more than 200 miles without recharging is pretty darn USEFUL to me.
“Oil will have fall to $9-$10 a barrel…in order for gasoline cars to remain competitive…and to $17-$19 a barrel for diesel…”
Last I checked, both gasoline and diesel vehicles were more competitive than electric cars. So…they are predicting electric cars will advance so quickly as to make gas powered cars obsolete? Not until someone solves the energy storage problem – or they regulate it into a distorted market.
“These are stunning numbers, and they suggest that the economics of renewables in tandem with EVs are set to become irresistible over the next decade.”
These numbers are completely made up…When the economics makes electric vehicles less expensive and more practical, then people will buy them. Meanwhile, people are going to drive and purchase that which makes economic sense to them. It’s amazing how economics works…they should go take a course in it sometime.
Besides, we are all going to die of global warming in 11 years and 6 months, so why does this matter?
Worse both solar and wind are ONLY available in the first place thanks to the use of ‘evil fossil fuels ‘ in both construction and transportation.
AND thanks to fossil fuels for back-up when the wind doesn’t blow at the right speed, the sun isn’t shining, the panels or blades are covered in snow/ice, etc.
P’raps the really stunning falsehood in this paper is the EPA definition of MPGe. They compare the kWh of the chemical energy in a gallon of fuel to a kWh hour of electricity. NO mention of how that electricity is produced. Over 85% of the electric supply is fossil fuels, so the conversion should be about .15*33=5kwh from renewables and CO2free nuclear – about 33*.85*.4 overall electric energy conversion=11.22/33=.34 equivalent gallons of fuel.
The true MPGe is about 1/3 of the claimed 33kWh. The 80-105MPGe values are actually 24-34 MPGe- very similar and in many cases less than the newer compact and midsize cars. The hybrids are all at better than that, and some like the Prius approach diesel efficiencies at 54mpg.
If oil really was that uncompetitive, and renewables really were that cheap, there would be no need for governments to promote or subsidize them, the private sector would be stampeding to get in on the action and oil stocks would be nosediving.
What color is the sky on the planet where these deluded thinkers live?
Exactly, Art.
The only sure way for products to achieve their best value is for market forces to drive their evolution. If ICE powered vehicles are deigned to the junkyard, it will be a natural progression of the market, gov’t need not intervene. There is a reason that by far most people buy ICE vehicles – they are cheap(er), now dependable to at least 200,000 miles, can be dependably driven any distance, and they don’t significantly pollute.
Come on, you don’t believe that oil investors would rather put money into a sure bet that would yield better returns than they would take a risk on an investment with less returns? I guess you need to major in Latin Studies to understand such complexities.
Back when I was in college, somebody came out with a study that allegedly proved that when you cut work hours back to 35 hr/week, workers became so much more productive that they actually created more output than they did at 40 hr/week.
Since this had been “proven”, “scientifically”, more than a few leftists started demanding that since companies were too stupid to see for themselves how much more money they would be making if they cut back work hours, therefor government needed to step in and mandate a shorter work week. For their own good, of course.
Here is another new coined term ERTI, which stands for Energy Return on Tax Investment. Trying to subsidize energy on a massive scale is comparable to using public funds to support air and water consumption. And as a side reminder, you can’t tax the rich for vote-buying programs when you have already rewarded them with a king’s ransom in tax credits. But you can put on the appearance of trying with enough donations and paid media fawning.
See, and there was me thinking they actually meant it when they said it would cost >$100 trillion to get to where we’re at NOW with hydrocarbons. Turns out it’ll really be just like money growing on trees, or unicorns farting Energy Rainbows!
The full report is here …
WELLS, WIRES, AND WHEELS…EROCI AND THE TOUGH ROAD AHEAD FOR OIL
https://docfinder.bnpparibas-am.com/api/files/1094E5B9-2FAA-47A3-805D-EF65EAD09A7F
He shoots himself in the foot in the introduction…
More like a Tough Road Ahead without oil…
Fossil fuels are required to make Rubber and Road Pavement
Without it we will be driving on Steel Wheels around wooden rims on streets paved with stones or with dirt that turns to mud in the winter and has ruts all year round. A truely Tough Road
I see my belief that using an advisor to invest my money is the wrong choice is born out here.
BNP Paribus is a bank (or, more correctly, a “banque” since they originated in France [or, more correctly, Remulak]). They’re supposed to be financially savvy, since they make investments on behalf of their clients. I wouldn’t trust my money to these Bozos.
But then, I don’t like French banques anyway. From a 2011 trip I took to Paris, the following Facebook post:
“I went to the banque to cash a cheque. But the clerque was a jerque. So I said: “You’re a dique!” and I walqued right out…”
I wonder where this dickbrain invests his own money? Anyone think it might be other than ‘green’ stuff?
There is the old chestnut of when a financial advisor boasts of his success and points to his Ferrari – potential client says ‘great, now show me your clients’ Ferraris’
When my wife talks to financial advisers seeking her business, the first question she asks is “What’s your net worth?” If it isn’t way more than hers (and she’s a millionaire), she just walks away.
Sounds like your wife is an unpleasant woman.
“Why is there such an incessant need for these people to make up fake metrics, fake numbers and declare an end to reality?”
Because the actual science not only fails to support their position, it unconditionally falsifies it.
Because the environmental impact and the economics of green are so harmful, the only way to make it look good is to lie.
Because the political left embraced the wrong side of purposefully deceptive science, while many on the left are so emotionally committed to ideology they can’t perceive how they’re being deceived, much less admit error.
But, if I ask you this question, “How certain are you that global warming is not responsible for the new weather patterns we’re seeing”, will that make you see the light?
Do I need a /sarc?
Do I need a /sarc?
You shouldn’t when referring to something that’s not happening as the cause of something else that’s not happening, but then again, too many people consider that your question is relevant.
If renewable energy provides a better return than fossil fuels why are our energy prices soaring and renewables subsidized? People aren’t stupid enough to believe this crap.
“People aren’t stupid enough to believe this crap.”
Clearly you need to get out more often.
I agree. It appears the majority are that stupid.
Using the word “renewable” to describe intermittent ambient sourced energy demonstrates automatic acceptance of the crap.
The only current energy technology known to man that could be rightly classified as renewable is combustion of wood from managed forests. Wind and solar based generators cannot produce enough energy over their probable life to support their replication in the modern economy. Intermittent generation is thoroughly hobbled by the need and high cost of storage for dispatchable output.
Based on this bass-ackwards math, $9/bbl oil is worth more than $60/bbl oil.
That’s not what is displayed in the graph. How did you arrive at it?
It doesn’t mean the end price (worth), but investment. The smaller investment, the cheaper, better energy. However, this stuff is so convoluted I don’t comment.
You don’t make an investment to get a return in TWh.
If you invest $100 billion in developing oil fields, you’re not going to get a better return with oil at $9/bbl than you would at $60/bbl.
Here in London, I pay about 26¢/kWh (22p/kWh) and for petrol about US$ 6/US gal (£1.30/litre).
What the graph says is that $100 B produces more electricity if oil $9/barrel instead of $60/barrel. Is that a surprise? How is that “mental”? As in:
Based on this bass-ackwards math, $9/bbl oil is worth more than $60/bbl oil. I only minored in math and spent most of the last 40 years involved in economic geology… But that is just fracking mental.
Are you generally surprised when cheaper raw materials produce more product per money invested?
Like everyone else, I am dubious about the cost per TWH of solar and offshore wind; but truer numbers will become available as the current installations are maintained and then replaced.
It’s mental because:
I covered that in a subsequent paragraph.
1. It is definitely worth considering.
2. That is the correct comparison if you are thinking about $100B to invest now.
3. TWH is the product. You seem not to be interested in this.
4. I expect that is probably true. I expect better estimates in updates.
5. This is not about investing in developing oil fields, it is about investing in electricity generation. Presumably the capital costs of developing oil fields like the capital costs of developing the manufacturing infrastructure for windmills and solar farms will be adequately covered in the sale prices of these goods (needs to be checked, naturally.)
The “product” doesn’t matter… the $ returned on $ invested is all that matters.
Matthew,
The idea that the value of oil can be measured by a single simple metric like the amount of electricity that can be produced by it is beyond stupid. There are many other things that factor in, like the ability to store and transport it, the fact that it is a feed stock for many industrial processes, etc. This is exactly why the market value ($$) is used because it reflects all these thing and more. Basic macro economics.
The value of oil can easily be measured by s single metric:
Sales price ($/bbl) – Finding & development cost ($/bbl) = Value ($/bbl)
Of course, you would have to perform a discounted cash flow analysis to determine what it’s truly worth…
https://www.investopedia.com/terms/p/pv10.asp
And that’s complete rubbish. The amount of energy (oil) capable of being produced by any investment is totally independent of the price of oil. That’s a simple fact.
Price is set by supply and demand, not by investment or the cost of production.
You can look at the equivalent cost in energy terms of oil versus renewables and see what price oil might fall to, but you don’t need this nonsense to do that.
This is silly.
The graph “Stark Numbers” compares a purported unit price per nameplate capacity in GW of so-called “non-hydro renewables” with a unit price per barrel of some form of oil (which is a unit of energy).
Apples and oranges.
Dustbin. Start over.
Kurt in Switzerland: The graph “Stark Numbers” compares a purported unit price per nameplate capacity in GW
The vertical scale in energy out, terrawatt-hours.
Start over.
I agree. I look forward to frequent updates.
Makes no sense to me. The energy return (in terms of the amount of energy) is surely independent of price?
For any given investment I get the same amount of oil, regardless of what price I can sell it for. And the price I can sell it for is independent of the investment. So this is just nonsense. And once I have invested, that investment is sunk cost, so to continue producing I just need to cover operating costs. That’s the error the Saudis made about US shale oil.
What he’s trying to do is to work out renewable prices (based on total costs) and then see what the equivalent oil price needs to be to be competitive. That’s fine but you don’t need thus dumb metric for that.
Assuming $55/bbl oil and $2.50 mcf natural gas… If I spend $20 million to drill and produce a 1 million barrel oil well, I’ll produce just as much energy as a 5.8 BCF natural gas well. If the reservoir was gas-filled instead of oil-filled, it would cost the same to drill, $20 million.
The oil well would make a profit of almost $26 million. The gas well would be a loss of almost $8 million.
What I find so distasteful is that progressive wordsmiths are constantly re-defining words (as in “making more acidic”) and engaging in cherry picking facts to try to make it appear that 2 + 2 = 5, without any sense of shame. They behave as though they believe that any means justifies the end. But, they can’t even make a compelling case that their desired end is necessary, let alone achievable.
How many fingers, Winston?
“They behave as though they believe that any means justifies the end.”
They use what works.
Wow. Someone give these tools their own state and have at it. Maybe Oregon.
When all their fantasies have the bugs worked out, check back with the rest of us and please do a progress report while you’re at it.
Good luck and Godspeed.
No, they can live on the floating plastic island in the Pacific.
What a pity most of it is too small to see with the naked eye, and comes from Asia where – shock! – environmentalism doesn’t seem to cut much ice.
..And now, I’ve heard those on the Left tell us recently, that the Pacific Plastic Patch (the size of Texas, you know), while Yes, most of said material originates as outflow/direct open ocean dump centered on an Asian origin…is really ‘All Our Fault’ – ‘Our’ being the West, by doing the Environmentally Sound Thing by recycling our trash. What I now hear is this dumping is actually our Sin, because the Connex boxes we send over brimming with our Environmentally-conscious Recyclables are rejected and ocean or river-dumped by the aforementioned Asians..because We left un-rinsed foodstuffs inside to fester and rot during the transoceanic journey!!
Can’t win for the losing, I guess…
Regards again,
MCR
They can quote that kind of cr@p because they know Politicians are too dumb to know any different.
I know some leftists, they are SUPER IDEALISTIC and do not like parts of reality, and they think if they just chant long enough it will change the universe.
There are a few leftists who are AGW sceptics. I’m one and I think Piers Corbyn is another. What makes us different from other leftists is that we are both scientists.
A vehicle buying decision has a number of pricing components.
Mileage is one, but anyone who has purchased a vehicle knows the actual price and financing costs are the largest cost components components, not the quantity and cost of energy used.
A vehicle running $20 to $30,000 more than an equivalent gasoline vehicle, such as current electric products without government subsidies, fuel cost is the not the primary factor driving a purchase decision.
When electric vehicles provided similar space, power, operating distance and speed of refueling to current gasoline and diesel vehicles, then buyers will have a clear financial choice by which to make a decision.
GM believes it has found the secret sauce as it appears to be moving to an all electric fleet. This will be an interesting exercise if the company stays this course.
“GM believes it has found the secret sauce as it appears to be moving to an all electric fleet. ”
All electric meaning only EVs, or meaning EV + hybrid (some ICE component)? I seriously doubt the former.
Neither like Volvo the intent is make EV of all types and NOT to stop producing ICE. There is a big difference between increasing the types of EV and not selling ICE.
For new vehicles, depreciation in resale value is probably the most significant non-current cost factor.
While new vehicle buyers might be splitting the atom with Excel exercises about comparative fuel costs, they seem oblivious to the fact that they’re about to kiss off $10 – $20k the moment they hit the public streets with in their shiny new ride.
GM? Why not?
When you go bankrupt and get the taxpayers to bail you out once, hey! we got your back. Go for it.
When you reward gross mismanagement, you get more mismanagement.
Oh, and rename your finance unit from GMAC to Ally. All better now.
My wife places paint colour as the main factor in new car buying.
Analyse that, you clever economists.
There is nothing wrong with the comparison of the energy output of two sources. Turning the energy into dollar equivalents adds nothing to the analysis. However, the energy metric has to be the same for both. Eg, mechanical energy from an internal combusion engine isn’t directly comparable to electricity from a solar panel.
The most serious — and common – error in this is comparing capital costs to operating costs. That’s an “F” level MBA 101 error. Total costs, taking into account operating lifespan of each engine, is the only meaningful number. In this example, ignoring the operating costs of wind turbines is nuts.
Needless to say, there are a host of assumptions in this process. Caveat emptor.
The only things that matter are:
1) How much does it cost to produce and/or generate?
2) How much can you sell it for?
The answers to both of those questions are not denominated in Btu, kWh, joules or any other energy metric. The answers are denominated in $$$ and other currencies.
Indeed, because there are also real world factors that determine the retail costs and benefits for the buyer. For instance, it would be cheaper to sleep on a pile of straw than it would on a modern mattress, but that doesn’t make the pile of straw the desirable choice or the better bargain.
Yes. I am retired. Drive 5000 miles per year. The economy would grind to a zero before the cost of fuel would be much of a consideration.
OTOH, because of local traffic – and I only drive locally – metrics on my car say I am averaging 16 miles per hour when I drive. A comfortable seat, AC, and a good sound system (with Sirius-XM) are far more important to me. Since those are the qualities my ICE car has, short of government dictat, there is absolutely no reason to buy an EV.
But free markets allow one to sleep on a pile of straw if one so desires, for whatever reasons. There was (is?) a market for hair shirts. One size fits nobody.
Governments can only distort markets and allocate shortages. Would any of you want Bernie Sanders to make life choices for you?
Hmmm…..
I thought EROEI was at least a partially useful metric. I liked the idea that you could, for instance, compare the energy cost of building a windmill and directly compare to the total energy output of that windmill over it’s expected lifespan. When the numbers do not add up, it is obvious that the whirlygig is a losing proposition. I thought it was a better argument than “Cost”, because subsidies and tax breaks obscure the real cost. Then you get “Cut subsidies for fossil fuels”, then those same people studiously ignore huge surcharges on ratepayer bills. So the whole “Cost” discussion gets quickly derailed. (Some AE advocates are so agile at derailing a “Cost” discussion that you might suspect they had been practicing.)
In any event, the EROEI metric cuts through all that clutter.
I always considered the E (energy) part to be a good proxy for “stuff”, because everything requires energy to make and deliver. (Note: I said “proxy”, it is an estimate, not a measurement) Sometimes a proxy allows you to get an estimate for a thing you cannot measure directly. So perhaps useful.
And of course, Energy is an excellent proxy for that universal commodity, Money. To be sure, there are any number of markets where Energy and Money can be converted and exchanged. So it stands to reason that one can be used as a proxy for the other.
This whole EROCI metric does seem to be an Academic’s dream, and nothing more.
Costs and revenue are all denominated in $$$.
With oil at $58/bbl and natural gas at $2.10/mcf, oil is worth $10.00/mmBtu and natural gas is worth $2.10/mmBtu.
D. Middleton, NG 1/5 the cost of “oil” so why are we not using CNG (3000 psi) for our transportation vehicles? The 1980 NG “shortage” is history. Fracking has produced a 2020 NG “glut”. CNG avoids the cost of building and operating a CCNG plants. The plant is twice as efficient as the ICE but so what, it’s not about energy it’s about money. Burning NG to produce electricity that has to be squeezed into wires and a bunch of transformers to charge a battery to power an electric car that won’t start in the winter is poor economics.
Pretty much the same reason Ford F-Series pickup trucks outsell all makes & models of EV’s combined.
The Marcellus will eventually peak… Cheap natural gas isn’t permanent.
Indeed, David, money continues to be the primary measure of many life factors because it has proved to be such a successful concept. If it had not evolved, we would have invented it to fill a need. Geoff S
There are no proxies for free, individual human beings. A good analogy is that people vote with their feet; remember the walls needed to keep in East Germans? Things are so good in the U.S. that we need walls to keep the world’s poor out.
When a government has to force people to do something, that government has failed in its duty to “stay the hell out of my business.” Even the UN IPCC politicians/bureaucrats acknowledge there is no climate emergency.
Wow, thank god!! We can end the calls for socialism and just go with the free market again. Too bad for the oil barons.
I agree. No need for anymore discussion. Investors can back whichever horse they want, and the free maket can decide who wins. Oh, and clearly no subsidies or tax differentials should be used to determine the winner. Nor should governments ban one to allow the other a win by default.
I, like all other consumers, stand ready to buy the most cost effective solution that fits my needs.
21st century governments and administrators stand ready to pursue whatever course strengthens their grip on power. That motive trumps everything that occurs at an individual level. The cost effective solution is whatever those in power decide will increase their power and control.
Anyone owning a roof in Australia is economically disadvantaged if they do not have solar panels on it. Until the climate change/CO2 myth is busted, governments and those in charge will continue to ride that fabulously enriching gravy train; legislating to drive individual behaviour to further enrich themselves.
USA momentarily dodged a bullet by electing Trump – and not by much. But State governments and administrators are deeply mired in the swamp and will not give up their grip on power without a fight.
QUESTION: Does anybody know how much is the cost of fuel in my electricity bill?
I pay 13 cents per KwH, and 6.6 cents is the price of the electricity. BUT, what is the actual cost of the fuel, when using coal, oil, nuclear, gas, etc. A big part of that 6.6 cents must be for the cost of the power plant and compensation of the power plant workers, insurance, etc.
I do not know where to find this information.
You can get an idea from EIA’s LCOE reports.
https://www.eia.gov/outlooks/aeo/pdf/electricity_generation.pdf
It all depends on the generating source and fuel type.
The LCOE for natural gas advanced combined cycle is about 4.12¢/kWh, about 3.15¢/kWh is the cost of the fuel.
The LCOE’s for onshore wind and solar PV are 5.59¢/kWh and 6.0¢/kWh respectively, but the fuel is free and the taxpayers pick up about 30% of the cost.
Comparing LCOE of a dispatchable source of electricity with that of an intermittent source is meaningless. Making such comparisons is deceptive and misleading.
The guaranteed output from any intermittent ambient generating source is precisely ZERO. Hence the LCOE for dispatchable energy from that source alone is INFINITE.
With current cost of storage and typical capacity factor for fixed array solar at 35 degrees latitude, the minimum LCOE for dispatchable output is around 40c/kWh; tracking array a little less. In most circumstances wind is higher LCOE than solar at that latitude and at lower latitudes. At higher latitude, wind is likely lower LCOE for dispatchable output than solar but likely more than 40c/kWh unless winds are reliable year round at the particular location.
The only circumstances where intermittent generation has economic merit, with existing technology, is a predominantly hydro supplied power system that is perched water constrained.
It’s meaningful because fossil fuels kick the living schist out of wind and solar, even with data skewed in favor of wind and solar.
Ah you’re missing that he is only factoring in “useful” energy. Gasoline and diesel fuel obviously do not produce useful energy, it produces worthless energy – probably the true source of that mysterious dark energy that astronomers have been looking for.
“Energy returned on capital invested”
I think they forgot about the VALUE of that energy when produced.
For the electricity markets, renewables increasingly produce a greater share of their kW precisely when the market price is at its lowest (sometimes nil, or even beneath nil).
Excellent point. Sometimes we talk about electricity as if it’s value is only in the watt hours provided. But consumers want electricity when they want it, with high quality performance and reliability. Lower quality energy supplies can result in significantly higher other costs for its users. It is interesting to hear how much cheaper insect protein is than many other sources, but it does not mean a great transition is at hand.
Last winter I tried to determine the cost difference for fueling a vehicle with gasoline, electricity or compressed natural gas (3000 psi). I was surprised at how little information I could find. The well to wheel google search found these two sources. Neither source made a clear statement of the cost basis, but after a few calculations I determined the DOE used $012 kw-hr, electric, $12.00 mcf Natural gas and $144 bbl crude oil in determining that EV’s were the most economical transportation mode (typical government work). If anyone has better links please reference.
https://www.researchgate.net/publication/264981402_Well-to-wheel_analysis_of_direct_and_indirect_use_of_natural_gas_in_passenger_vehicles
https://www.ornl.gov/content/well-wheel-analysis-direct-and-indirect-use-natural-gas-passenger-vehicles
I wonder what kind of car the EROCI guy drives.
And what happens to the price of electricity if we all convert to solar and wind. With no taxes from fossil fuels taxes on electricity will go up. I doubt Mr EROCI made any allowance for that.