Are Combustion Engines Reaching Peak Demand?

Imagine if we woke up tomorrow and read the headline, “GLOBAL PACT: ALL COUNTRIES AGREE TO BAN THE SALE OF INTERNAL COMBUSTION ENGINES.” And then imagine that we wake up in 2040 and learn that every country actually kept to their promise. In 23 years all new vehicle sales—everywhere—would be electrically-powered. I call this scenario “GB40” – a global ban on the sales of internal combustion engine (ICE) vehicles by the year 2040. For reference, the GB40 market penetration of electric vehicles (EVs) would…

Electric Vehicles And The 5 Trillion Dollar Market Transition

Change in the world of wheels is accelerating! Momentum is building and some days it’s hard to keep up. Every week, the assumptions about the future of transportation, and the energy systems that turn our wheels, are becoming more Jetson-esque. The excitement is palpable and as a technology junkie I love it. Auto shows are rolling out new electric vehicle (EV) models; China says it’s planning on banning internal combustion engines (ICE); and Daimler is jockeying with Tesla in the budding electric truck segment. In the battery world,…

The Boring Truth About Oil Prices

The outlook for 2018 oil prices is dull. A majority of pundits have now corralled their one-year forecasts into a narrow, “lower-for-longer” price band, with little disagreement. A humdrum, fifty-dollar-a-barrel price outlook for next year is part of a recipe to stifle investment, mute production growth and burn off inventories. On a positive note, that’s what’s ultimately needed to cook up higher oil prices. The Yawn Consensus A few keystrokes on a Bloomberg terminal will get you a list of 24 recent oil price forecasts…

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The Boring Truth About Oil Prices

The outlook for 2018 oil prices is dull. A majority of pundits have now corralled their one-year forecasts into a narrow, “lower-for-longer” price band, with little disagreement. A humdrum, fifty-dollar-a-barrel price outlook for next year is part of a recipe to stifle investment, mute production growth and burn off inventories. On a positive note, that’s what’s ultimately needed to cook up higher oil prices. The Yawn Consensus A few keystrokes on a Bloomberg terminal will get you a list of 24 recent oil price forecasts…

An Energy Independent North America Needs NAFTA

NAFTA talks continue. Goods like milk, lumber and auto parts are all under the negotiators’ microscopes. Oil is clearly visible too. Last year, the bilateral trade of energy (including natural gas, oil and power) between the U.S. and Canada was about U.S $55 billion, with oil being 80 percent of the total. Its dollar amount dwarfs other industries, but negotiators may need to view this vital commodity using a different lens. Beyond size, the upstream oil business between America and Canada reveals big shifts in dollar and volume trade over…

Will The EV Hype Actually Help The Oil Business?

Last week’s announcement by Volvo that every car, “it launches from 2019 will have an electric motor,” jolted oil investors. Then France amped up the newswire by switching on a ban: No more combustion car sales by 2040. To cap off a trilogy of electric vehicle (EV) proclamations, Elon Musk lit up the twitter feed with a photo of Tesla Motor’s first Model 3 production car. Oil companies and investors should take note. These announcements are impacting the industry and will increasingly do so. But it’s not because electric…

Offshore Gulf Of Mexico Operations Continue As Cindy Rages On

Two of British Petroleum’s major projects have had the storm pass over them, with equipment successfully weathering rain and minor ocean swells. The oil major had evacuated non-essential workers from the Mad Dog and Atlantis platforms, but those who manage production remained onsite due to the storm’s waning severity. “Our top priority is the safety of all personnel and protecting the environment,” BP said, according to the Houston Chronicle. “We remain prepared to respond as conditions warrant.” Chevron and…

Mississippi’s Future Clean Coal Plant Gets Quashed By Regulators

Clean coal’s future isn’t looking so bright today, as Mississippi regulators voted to stop progress on the second clean coal power plant in the U.S. in favor of cheaper natural gas. Southern Co., the utility that has been working on a new type of coal-fired power plant that emits no CO2, seems to be out of luck – the Mississippi Public Service Commission has asked the company to keep the Kemper plant running on natural gas, saying this will “eliminate ratepayer risk for unproven technology and assure no rate increase”…

Shale Efficiency Has Peaked… For Now

Learning takes time and effort. But a good education pays off. North America’s oil industry has been in school for the past three years, studying how to become more productive in a fragile $50-a-barrel world. Many companies in the class of 2017 have graduated and are now competing hard for a greater share of global barrels. Having said that, North America’s education on how to make oilfields more productive appears to be stalling. After a breathtaking uphill sprint, productivity data from the U.S. Energy Information Agency (EIA) shows…

The Upcoming Surge In U.S. Oil Demand Explained In One Chart

Wow. It’s not often a chart can say so much about human behavior, economic theory, oil consumption and maybe even the future of energy all in one spreadsheet column. For one thing, the data I show this week confirms the maxim that “size matters.” When it comes to buying a new vehicle in North America, the bigger-is-better sentiment has been growing over the past 30 years, and especially so in the past three. The simple line graph in Figure 1 shows the percentage of people that walk into a car dealership in the United States, kick…