Demand is temporarily down because of covid and the russia/opec dispute. Consumption was hitting records before that, and the EIA projects over 100m barrels/day next year: https://www.eia.gov/outlooks/steo/report/global_oil.php

Also take a look at this inflation adjusted crude oil chart: https://www.macrotrends.net/1369/crude-oil-price-history-cha...

You have a high period from 1980-85 and from 2005-14... but those are the exceptions rather than the norm. I'm sure they got spoiled by the high prices, but $40-50 is a normal price for oil.. and they'll learn to adjust like they have in the past.

The electrification of transportation is great and it'll eventually have the effects your mention... but right now, those effects are out weighed by the growth in developing markets. Very similar effect as renewables and coal. Coal use will keep growing through 2030, even though renewables are growing rapidly. The demand for these things (vehicles, energy) is much higher than what the clean economy can deliver at the moment.

Prices have dropped more frequently because of US shale oil. Electrification is a very small factor (yet).

Fair enough on all points.

Electrification is the longer term existential threat. Even if 20% of vehicles are electric, the impact on demand and oil prices will be profound.

You might sum it up as:

These countries weather boom/bust cycles in oil prices, waiting for a 'someday' to refill their coffers, and every year there are more and more things trying to put off 'someday' a little longer.

Essentially these countries have an antagonistic relationship with the rest of the world, as do quite a few corporations really. If you only get good news when everyone else gets bad news, then you've made an enemy of your customers. They just might know it yet. Lots of them will be working in an uncoordinated fashion to make their bad news a little better, making your good news worse and worse.

Once word gets around they'll start teaming up.

> Once word gets around they'll start teaming up.

They were able to do this fairly successfully until shale oil and spoiled their intermittently successful collusion.

They were only able to do it because Saudi Arriba was willing to take almost all of the cuts required. In the 1970s opec vot better compliance, but cartels tend to fail because it is the benifit of the individual to defect while everyone else makes cuts. Saudi Arriba is not able to make deep enough cuts alone though, and it is hard to see anyone else making them.

I've always wondered how much black market petroleum is state sanctioned. Unofficially, of course.

Eventually New England will also have to outlaw the use of #2 heating oil.

I know it is the southern end of New England but a friend of mine in Connecticut just switched to a pellet stove for heating his large home. He plans to pay for the stove in two winters worth of heating.

"The point here is that sub $40 oil is becoming the new norm"

Crude is currently $41.74 as of 1:10PM EDT.

Also a fair point, but since most of these countries need oil to be at $70-80/ barrel to balance their books, do you think they will care about how that hair is split?

Did I not hear that some of those high numbers either have to do with corruption or over-reliance of public services on socialized oil industry profits?

Last time this came up someone was trying to make the argument that the reason some countries need 50% higher oil prices has less to do with the costs of extracting and shipping the oil and more to do with the cost of doing business in that country.

If so, you may see some pressure to change the equation, for better or worse.

I highly doubt reform will be high on the list of priorities for a corrupt regime in decline. I would expect that the poor and middle class would suffer far more and first.

I did not mean to imply that the pressure would necessarily be orderly or civil.

Which is the highest WTI crude has been in months.

I don't think it's about demand. If oil price were regulated as a honest market, it would cost much lower. Oil price is regulated by OPEC cartel. They could make it $200 if they want. I think that they're manipulating price low enough to slow development of non-oil energetics as much as possible and high enough to stay profitable. Also they're interested to put a pressure on Russia and some other countries, because Russia spends much more to get oil from the earth, so their margins are much tighter.

No, they most likely can't really make it $200 for any significant amount of time. As everyone else at the moment they have to navigate the market, that now has more producers.

>If oil price were regulated as a honest market, it would cost much lower.

No, if oil was regulated as an honest market, it'd have the CO2 externality priced in to make it carbon neutral. That'd make the price significantly higher.

> Oil price is regulated by OPEC cartel. They could make it $200 if they want.

This is why oil prices have been high since the late 70s. Shale oil and oil sands have put a big damper on the OPEC's ability to set prices. The only control OPEC has on oil prices is by limiting supply. Limiting supply to control prices only works when you can reap the rewards. If OPEC drops prices and US shale oil companies turn up the volume, then OPEC only gets the downside of limiting supply while shale oil gets the profits.

OPEC just doesn't have enough pricing power anymore.

As they say in the oil industry: the cure for low oil prices is low oil prices. In any case, if the developing world is really to develop as much as hoped for and claimed they will need a lot of oil. Even if it is all renewables based (which is a fantasy) those renewables require large oil inputs to be manufactured (those 400 ton mining trucks won't be electrified anytime soon). So while I expect oil to be down over the next year or so, I think the long-term trend is upwards, for better or for worse.

The heavy trucks used in the mining industry are almost entirely electric. If a truck is going underground, much better for it to not be spitting fumes that will kill your workers, and if the mine is at the top of a hill, the regenerative braking from a loaded truck going downhill will charge the batteries so much that the trucks rarely, if ever, have to be manually charged.

Some of the trucks in question: https://www.komatsuamerica.com/equipment/trucks/electric

Those have diesel engines. You don't know what you're talking about. The electric drive is to make power transmission easier, and yes, to allow for regenerative breaking.

It allows regenerative braking in principle, I don't know if any mining truck actually has one. Imagine the size and weight of a battery to power a 200T truck (total weight up to 385 metric tons) for any significant time. These trucks use induction brakes, which do not give back any energy, for the same reason they use electric motors instead of a gearbox - a lone friction brake for such a heavy machine would be too heavy and wear out too quickly (they do have auxiliary friction breaks, though).

Yeah, you're right. I had two different Komatsu PR things open and one was talking about regenerative braking and the other was for these electric drive trucks. Doesn't look like they have any sort of battery. Just alternators to generate electricity from the diesel engines.

Thanks for the comment. I took the previous poster's comment at face value (seemed like common sense). My internal db has been updated.

The comment is wrong. Those trucks have diesel engines. It's even on the page they posted. The electric drive is for power transmission/traction control.

> those 400 ton mining trucks won't be electrified anytime soon

https://www.popularmechanics.com/technology/infrastructure/a...

I'm aware of these developments. I still don't think it's going to happen at scale. The economics are not favorable for electrifying these vehicles.

Mining trucks and industrial infrastructure don't really reflect the bulk of petroleum use. Something like 2/3 of the total US petroleum input goes to simple civil transportation alone.

Heavy industry and core infrastructure are the last things that people interested in renewables will be fighting over. The low hanging fruit of personal vehicles and electricity generation is what's killing the middle east oil cartel.

The passenger transport market drives the others. Engine development is not easy when you need to meet modern emissions. Switch passenger cars to electric and the others won't have enough money to do the basic research needed for the next engine.

Sure, my point is just that the developing world is going to use a lot of petroleum in order to develop. Mining was just an example of where it's used. No one commenting has refuted that, and the people talking about electric mining trucks don't know what they are talking about and have probably never been to a mine before.

> Sure, my point is just that the developing world is going to use a lot of petroleum in order to develop.

And mine was that it doesn't need to. The only reason it needs a ton of oil is if it wants to emulate the US obsession with private transportation, which even the US is getting away from. It's not like Civ 6 here: they don't need to invent the internal combustion engine for themselves.

There is no realistic path to development based on renewables without setting global living standards significantly below current developed world living standards. Just look at the number of countries that are developing. Look at their populations, and assume 50% of those populations get to 50% of European levels of energy use. Now look at the transition to renewables. Also note that 50%+ of "renewables" in Europe is biomass, which is arguably not renewable and environmentally destructive.

The idea that developing countries can develop without increasing global demand for oil is a fairy tale, and impossible to believe by anyone who thinks about the issue for more than a few minutes. Admittedly, there are in theory possible paths that would avoid an increase in fossil fuel demand, but I have never seen someone bring them up when discussing this, nor have I even seen an understanding of the basic problems that need to be circumvented.

The scenario is "without oil" and not "based on renewables".

My argument is oil dependence is a ball and chain on the aspirations of the developing world. The need of minor counties to buy oil in dollars chains them to the US and European dominated financial system with ruthlessly exploits them and savages countries that try to fight back. Once the leaders of those countries are confident they can do without constantly importing oil they're going to run for the exits as fast as they can.

I don't like it when people here downvote things they don't agree with.

For one, it makes it hard to find the counterarguments, which are often where the best parts of the discussion are.

I think the point about the cure for low oil prices is low oil prices stands on its own, but not as a virtue (not that I think you were implying that).

It's a warning. Low oil prices cause complacency, which means the next minor emergency we have to go crawling back to them whether we want to or not. Low oil prices are the anesthetic in the mosquito's saliva.

Mining trucks are easily electrified. Long distance transport is the challenge.

Trains would like to have a word.

With 10s of thousands of miles of lines, it would be pretty monumental to electrify the entire US train system. Considering how efficient modern diesel trains are, That should be pretty low on our list of things to convert.

Nuclear trains might make sense with some of the newer reactors... but we know that'll never happen.

> Nuclear trains might make sense

Modern steam engines!

But I guess they'd have to construct a lot of water stations. The stops to take on water might negate some of the advantages.

Diesel trains are already electric. Their drive motors are electric with big Diesel generators on top. Their efficiency is due to their hybrid nature.

True although even in Europe where almost all mainlines are electrified, many freight trains are diesel-electric. That's because often the the plant loading docks etc. aren't electrified.

Most freight is carried by diesel trains. While it is possible to use electric engines, the ecconmics don't work out and so only a minority of freight is on electric trains.

Are you talking about the world or the US? Living in europe, I‘ve never seen a diesel train and the economics are just fine for electric trains.

There are diesel trains in Europe. They tend to be more on branch lines, though, with the main trunks being electric. (Electrifying every branch is not economic.)

In the US, it could still be done (and has), but the economics are not as compelling because the price of diesel is lower.

I'm told that the big railroads in the US have a plan to electrify their main line. It remains a plan because the costs are more high enough that it isn't worth it. If they decide fuel costs will go up by enough they will dust off the plan and electrify.

Diesel-electric trains. They're basically Diesel generators with electric drive motors.

Even renewables need tons of fossil to lubricate moving parts. Generators in a turbine alone is a massive oil guzzler. The world will always need oil until a synthetic lubricant that isn't insanely cost prohibitive.

We know how to make lubrication oil from other sources. Natural gas is a molecule easy to make from organic sources, and from there we already have the industrial processes to may synthetic oil. It costs a lot more than regular oil, and making your own natural gas drives up the cost, but it isn't impossible. Note that we can also make synthetic gasoline, last I checked (long ago, gasoline was $1.30/gallon) you could buy drums for about $8/gallon, the only people who paid that price were on a track and good enough that a better fuel was the difference between win and loss.

Yes, but the amount surely matters. If machines or car only require oil for lubrication, for example, that's probably one or two orders of magnitude less of oil needed.