Re:Oil Crash is Kicking Off One of the Largest Wealth Transf...
by pyre on Tuesday February 02, 2016 @02:44PM
(#11021925)
Once industries transition away from tooling that uses gas/oil, there will be significant cost to re-tooling back to using oil or gas. At this point oil/gas losses value because there is a barrier to using it. If all cars on the road are electric cars, then oil refined into gasoline won't see much use and the price will drop (relative to the costs to harvest it). It's not like a rise in the price of electricity will send people with 100% electric cars running to the gas pump.
Re:Oil Crash is Kicking Off One of the Largest Wealth Transf...
by toomuchtodo on Tuesday February 02, 2016 @02:49PM
(#11021970)
> It's not like a rise in the price of electricity will send people with 100% electric cars running to the gas pump.
And, with the cost of renewables continuing to drop, along with government incentives, I don't ever see the cost of electricity going back up. Ever.
Re:Oil Crash is Kicking Off One of the Largest Wealth Transf...
by pyre on Tuesday February 02, 2016 @06:00PM
(#11023406)
Well, my point was that the 100% electric cars don't run on gas. They would have to purchase a new car to take advantage of the gas prices, which is a higher barrier than just choosing to fill up with "electric fuel" or "liquid fuel" when your car is running low.
Re:Oil Crash is Kicking Off One of the Largest Wealth Transf...
by tamana on Wednesday February 03, 2016 @11:34AM
(#11027398)
Why do local utilities beg people to reduce their electricity usage?
Re:Oil Crash is Kicking Off One of the Largest Wealth Transf...
by toomuchtodo on Wednesday February 03, 2016 @01:31PM
(#11028467)
Because the cheapest watt to generate is the one you didn't have to generate in the first place.
On the other hand, Texas has so much wind power locally that they can't ship out of the state yet that some utilities give power away for free at night:
http://www.nytimes.com/2015/11/09/business/energy-environmen...
As more renewables come online (and they will, I assure you), this will further drive down the per kwh cost.
I think its about equally likely that the end game is that the price of oil (ultimately driven by energy to extract each unit) goes up until other things that are known are more cost effective for most uses; this doesn't make it "lose its value" -- the use value remains the same and the market clearing cost per unit is high -- but it shrinks the size of the market (there may be some uses for which it is still cost effective, but not as many) and is still bad for the oil & gas industry.