https://oilprice.com/Energy/Energy-General/Oil-Needs-To-Be-Below-20-To-Compete-With-Electric-Cars.html
[If oil needs to be around US$10 per barrel to be competitive with EVs
in the long term, and the bitumen sands need US$40 plus to be
profitable, the math suggests we need to be cutting our losses on the
Alberta/Saskatchewan subsidy sinkhole earlier rather than later so there
is some order in the transition instead of a rapid collapse into chaos.
As I have said for years, if you want to keep the majority of known oil
reserves in the ground, give the consumers a lower cost option. That
starts with removing the price signal distortion provided by massive
taxpayer subsidies to the oil and gas industry, and putting a price on
GHG emissions which at least matches the lowest cost practical means of
capturing and locking in (sequestering, not storing) the GHG emissions
(methane, NOx and carbon dioxide).
Darryl
links in online article]
Oil Needs To Be Below $20 To Compete With Electric Cars
By Tsvetana Paraskova - Aug 05, 2019
The long-term breakeven oil price needs to be as low as $9 or $10 a
barrel so that gasoline cars can remain competitive as a means of
transportation in the future, BNP Paribas Asset Management said in new
research this month.
The research report—authored by Mark Lewis, Global Head of
Sustainability Research at BNP Paribas Asset Management—introduces the
concept of Energy Return on Capital Invested (EROCI) to measure how much
a given capital outlay on oil and renewables translates into useful or
propulsive energy at the wheels: “in other words, for a given capital
outlay, how much mobility can you buy?”
According to BNP Paribas Asset Management’s analysis, at present, for
the same capital investment, wind and solar energy will already produce
significantly more useful energy for EVs than oil at $60 a barrel will
for cars and other light-duty vehicles (LDVs).
“For gasoline LDVs, we calculate the oil price required to yield as much
net energy as would new renewables projects in tandem with EVs at
$9-$10/bbl, and for diesel at $17-$19/bbl,” the report says.
“In short, whether in the form of gasoline or diesel, oil’s days as a
fuel for LDVs are clearly numbered because our EROCI analysis shows that
the economics of new wind and solar projects combined with EVs are set
to become irresistible,” BNP Paribas said.
The implications for oil majors are that “the challenge is on a scale
that they have never faced before, and business-as-usual is simply not
an option,” according to the report, which implies that current
investments in oil projects with breakevens of $20 a barrel or higher
could put as much as 40 percent of future annual output at risk of being
stranded.
Despite the stark warning to the oil industry, BNP Paribas Asset
Management’s report says that the “oil industry today enjoys a massive
scale advantage over wind and solar of several orders of magnitude – oil
supplied 33% of global energy in 2018 compared with only 3% from wind
and solar. Moreover, EVs are currently more expensive than ICE and
diesel vehicles on a sticker-price basis, and likely to remain so until
2023-25.”
Although the oil industry’s scale advantage is enormous today, it is
time-limited as oil companies have to invest in new projects “just to
stand still,” the report notes.
“For now, though, oil enjoys a significant energy-flow advantage over
renewables. The question is, how big is this advantage, and how long
will it last?” BNP Paribas Asset Management’s research report says.
=====================================
To subscribe, unsubscribe, turn vacation mode on or off,
or carry out other user-actions for this list, visit
https://www.freelists.org/list/keiths-list
Note: new climate change website is now in pre-launch
Visit https://www.10n10.ca/e/index.shtml
