The Return of “Beyond Petroleum”: All Talk and No Strategy?

BP even changed the logo.

By Leonard S. Hyman and Bill Tilles, for WOLF STREET:

“Oil and gas companies are becoming energy companies,” according to Bob Dudley. He heads the giant British oil company, BP, and stated this in a National Public Radio interview. Interestingly, his company under legendary CEO Lord Browne changed its name from British Petroleum to the far more ambiguous BP.

Browne informed the public that BP (now) stood for “beyond petroleum.” He changed the corporate logo to a green and yellow sunburst design and built up a renewable energy portfolio well ahead of other major energy companies.

But after Browne left, BP’s new senior management team refocused its commitment away from renewables (except for the environmentally-sensitive appearing) green logo and returned to their corporate roots, oil drilling.

Mr. Dudley’s proclamation comes shortly after two of the giant oil majors, Exxon and Chevron (upon retirement of long serving CEOs), decided to join the Oil and Gas Climate Initiative. This is a petroleum industry group established in 2015 that supported greenhouse gas emission curbs including the Paris Climate Accord.

Meanwhile, the drip-drip-drip of news about business accommodation to climate change continues. Transportation usage accounts for about 70% of the oil consumed in the United States. Running just cars on electricity (apart from trucks, planes and ships) would make an appreciable dent in demand for oil.

Tesla has led the way. Elon Musk and company captured the imagination of the public while raising billions from investors. Tesla’s finances as well as recent run-ins with the SEC and possibly the DoJ make many nervous for clear and good reason. But that is beside the point. Every major auto manufacturer now offers electric vehicles as an option.

In three years, 2016-2018, car companies launched an average of six electric models per year. In 2019-2021 they plan to launch 16 fully electrified models per year. VW, for example, projects that 30% of its cars will be powered by electric drive trains by 2025. Which means that while retail gasoline sales may slowly decline, most vehicles will still run on gasoline even a decade from now.

This multi-decadal timetable should give both the petroleum industries as well as the real beneficiaries, the electric utilities, ample time to prepare for the future. Once energy companies stop denying the reality, presumably they can move ahead. But there is always something.

Academic research shows that large business organizations often know well in advance that the times they are a-changing, so to speak. And that a competitor’s new products will take business from them. But despite this realization large, entrenched, often near monopolies will nevertheless fail to produce new product in response. Instead they adhere to original strategies, the ones that first made them a success.

The difficulty of organizational change in business is the stuff of legend – especially where the structure provides no convenient place for any new product or concept. Legacy managements fail to embrace new products or ideas, not because of ignorance or lack of foresight, but because of the self-imposed limits of their organizational structure. It is a conceptual “box” in which the managements operate and they oftentimes have trouble thinking outside of it.

We would argue that the decades-plus lead time before the electrification of the transportation sector, rather than conferring a business advantage to energy producing incumbents (plenty of time to get ready), actually or paradoxically presents instead a danger. Long lead times waiting for the end of the world, so to speak, tends to breed complacency.

Short-sighted executives can cut spending on R&D to maximize current profits, believing there will be plenty of time for innovation later on. We are not sure that the oil companies have a strategy for the coming transition. What can they offer besides their huge balance sheets versus relatively puny electric companies? Maybe that is the strategy. Do nothing now and then resort to mergers and acquisitions to solve the problem later. A strategy cynically known as, if you can’t beat ’em, just buy ’em.

Electric companies at least recognize that new products like electric vehicles (EVs) will substantially raise demand for electricity. For the electric industry, the irony is that they’re trapped in a different conceptual “box” involving legacy nuclear and fossil-fueled central-station power generating facilities. And these legacy units have to compete with ever cheapening electricity produced by renewables.

For the electric industry, there may be a pot of EV gold at the end of the rainbow. But industry management has to figure out how to supply existing customers and all that hoped-for new load while shuttering older, expensive coal and nuclear plants. By Leonard S. Hyman and Bill Tilles, for WOLF STREET

Sales of electricity in the US stagnated for years despite economic growth – a discouraging drip, drip of bad news for the electricity industry. But so far in 2018, electricity consumption rose 3.3%. In other industries, that’s not a high growth number. But for electric utilities, it constitutes unusually high levels of growth. Read… Why Have US Electricity Sales Surged in 2018, after Stagnating for Years?

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  99 comments for “The Return of “Beyond Petroleum”: All Talk and No Strategy?

  1. Ambrose Bierce says:

    Everybody has a dozen electronic gadgets and they all have to be charged.

    • ewmayer says:

      “Everybody has a dozen electronic gadgets and they all have to be charged.” — True, but beside the point in comparison to cars. Yes, your average consumer’s number of e-gizmos has steadily increased over the years, but at the same time the power usage of said gizmos has progressively decreased, probably even more dramatically for e.g. PCs/tablets than for “big” applances like fridges and washer/dryers because the former’s power consumption is dominated by microelectronics. (Flat-screen-TVs are an exception, if for no other reason than any per-square-inch power efficiency gains are negated by increasing average screen size.)

      E-cars are orders of magnitude more power-hungry than the above kinds of consumer electronics gear – a typical number for a Tesla is 300W per mile, so driving your Tesla for 5-10 minutes uses as much juice as your typical fridge does in a *day*.

      • Flying monkey says:

        “E-cars are orders of magnitude more power-hungry than the above kinds of consumer electronics gear – a typical number for a Tesla is 300W per mile” ….(just a small thing) the energy required would be measure in WHR “W” is just the rate a which energy is consumed w=Joule/second. If you drove 10 miles you would need 3 KWhr of power.

        The USA average per residential customer is about 30 KWHr/day. An internet search says Americans drive
        an average of 30 miles per day so you might need 9Kwhr of power for that or an increase in demand of 9/30 = 30% increase in Energy demand.

        • Gunther says:

          I so far discounted the use of car batteries to smooth out load on the network. However if one assumes 100KWh in a car of which 9KWh are used on average for driving and 30KWh per household and day and every household having one car then in the long run there is enough energy stored in cars to run the country for 3 days. Power plants could be operated quite differently.

    • citizen steve says:

      I don’t know that the gadgets and gizmos actually use an appreciable amount of juice. However, all of the huge flatscreen mega-TV’s in every single room sure use plenty – as does their vamp draw (especially the new ‘smart’ versions that spy on you). Although the powers that be are trying to clamp down on all the vamping.

      I would actually guess that a pretty large proportion of the decline in power consumption was via the demand destruction of all of the new energy efficient light bulbs (first CFL’s, then LEDs) replacing the old incandescent and halide bulbs, and then not having to run the AC to cool these things in the summer. In addition AC units themselves have gotten crazy-efficient compared to 20 years ago.

      The open question is how much of these incremental changes have run their course, and how much of this trend would we likely see into the future? I mean, dropping from a 60W bulb to an 8W bulb is a pretty big absolute difference – bigger than going from 8W to 0.5W or whatever. Similarly, what are the functional efficiency limits to things like AC units, refrigerators and the like?

      All and all, it’s hard to see humans consuming less unless they’re priced out of the market, so maybe this is what’s been happening…

      • BTilles says:

        Hi citizen steve,

        In brief, the demand destruction you refer to can be seen as part of a broader deindustrialization of the US economy and the transition towards a service economy which is less energy intensive.

        • polecat says:

          So hold your horses, rope your donkeys, and have the carts in good order.
          Ultimately THAT’s where we’re headed .. except for the royalty, who’ll demand palanquins for their conveyance !

  2. Alex says:

    The writers wouldn’t be vested in the renewables industry would they???

    The only way forward if we want to keep our modern way of life is modern nuclear power.

    • John Taylor says:

      I used to believe nuclear power was the solution as well. I’ve come to the realization that, while it can work fine elsewhere, it is nearly impossible in the current US regulatory environment.

      There will be no incentive for the US government to address this unless energy becomes a lot more expensive. For now, nuclear in the US will be the last remaining plants from the 70’s before they get shuttered like San Onofre did here.

      • BTilles says:

        Hi John,
        If I had to pick one word for US nuclear regulatiors it would be “supine.” How that attitude increases costs is beyond me.
        And as for the last nuclear plant standing, my vote goes to Southern Company’s Plant Vogtle.

        • Bookdoc says:

          Maybe the US Navy should run our nuclear power plants. They have an outstanding safety record.

        • Ensign Nemo says:

          The main problem with the US nuclear industry is that the designs for most plants are minor variations on the reactors used for military purposes. The US nuclear industry began when the Navy designs for submarines were used for civilian power plants. The designs made sense for ships. If the reactor melted down, it would sink the ship and the ocean would provide plenty of seawater for emergency coolant. This didn’t work so well at Fukushima, where the tsunami destroyed the backup generators used for pumping coolant and there were uncontrolled meltdowns.

          It is possible to build much safer designs, but the inertia of corporate cost-cutting and government regulation makes it unfeasible to try. Our real problems aren’t inherent in the nuclear technology, but rather in the way that our society is trying to use the wrong tools for the job by shoehorning military tech into a commercial role without much thought.

        • citizen steve says:

          Your last nuke plant standing wouldn’t be Fukushima diichi?

          My problem with nuclear power is that the risk of catastrophic accidents is >0%, and the damage is both cumulative and “forever” (as it pertains to human time scales (for example the t1/2 of Plutonium is ~24,000 years). So using nuclear is a terrible idea as a long term plan.

          The US military has had a terrible safety record with all things nuclear, unless the OP was just being funny (sarcasm is tough sometimes). They’re just a lot better at burying/hiding it than those on the civilian side – unless it’s so huge it’s unhideable – like Hanford or Thousand Oaks..

    • TXRancher says:

      Modern nuclear power would be a fusion reactor in every backyard.

      • BTilles says:

        Hi TX,
        “Modern” nuclear power to me sounds like the 1957 nuclear-powered Ford Nucleon. Fortunately just a concept car. Perhaps that’s just mid century modern.

    • BTilles says:

      From considerable personal experience I can say the authors have no “vested” interests in renewables.

      As for nuclear power the increasingly unattractive economics (hi costs to build and operate) will relegate nuclear to niche applications where economics are largely irrelevent (i.e. military applications, from whence it came).

    • Prairies says:

      Nuclear is nice in a stable environment, but is far more dangerous than it’s competing fuel sources. The issues caused by flooding in Japan should concern anyone pushing nuclear energy.

      • JoAnn Leichliter says:

        More recent nuclear reactor designs are enormously safer. The “renewables” get the subsidies, and are the trendy thing. Hope you all like expensive, unreliable electricity, because it is on its way.

        • Prairies says:

          They all claim to be safer, until the safety measure fails in 30 years and the catastrophe is forced on the world to solve. Japan had a lot of safety measures, the earthquake was what they prepared for and it survived the quake unharmed. The wave afterward was what they didn’t prepare for and it created an unexpected disaster.
          Every nuclear power plant is a ticking time bomb, and Chernobyl should forever be a reminder of the consequences. No matter how “enormous” your measurement of safety, the power should be left as a minor supply to help with over drawn systems.

        • kc says:

          Fossil fuels get the exploration well subsidy while nuclear power gets the clean up subsidy.

      • BTilles says:


    • Wolf Richter says:

      Nuclear power is the most expensive way of generating electricity, especially once you include the costs of decommissioning the plants and nuclear waste disposal. A big part of the costs and risks are born by taxpayers via various subsidies.

      Lots of people got rich off nuclear power, and now rate payers and tax payers are left holding the bag.

      “Modern nuclear power” is the same BS they told us in the 1970s.

    • Flying monkey says:

      What do you think of the thorium fuel cycle as a new alternative to nuclear?

      • BTilles says:

        Hi FlyingM,
        Thorium designs are alleged to be safer with more passive features. Also thorium is more plentiful in the earth’s crust than uranium. Real issue is whether there is still a place for this technology that probably should have been adopted fifty yrs ago but lost out to doomed breeder reactor technology in a budget fight.

    • phusg says:

      > The only way forward if we want to keep our modern way of life is modern nuclear power.

      Hence the only way forward is *not* wanting to keep our modern way of life.

      • BTilles says:

        Hi phusg,
        I guess we agree in a way. If you don’t care about cost, risk, dismantlement, or long term storage, nuclear power technology is awesome

    • phusg says:

      > Maybe that is the strategy. Do nothing now and then resort to mergers and acquisitions to solve the problem later. A strategy cynically known as, if you can’t beat ’em, just buy ’em.

      Nothing wrong with that strategy if you believe smaller companies are the only ones capable of efficiently innovating. The cynicism comes when time after time the innovations are bought and mothballed rather than built upon and scaled up using the balance sheet power of the monopoly/cartel member, eh I mean large company.

    • MD says:

      Is it..? Or is that just the way large corporate entities wish you to think (ie let them do the thinking for you)?

      Search ‘Bavarian town renewables’ for a different way.

  3. Mike Earussi says:

    The oil companies have no place to go. Their product is almost a monopoly in the sense that very few can afford to enter into their “game.” But electricity production is becoming more democratic as more people generate their own. So if oil companies tried to switch over to electric generation they’d leave their semi-monopoly behind and would be forced to face real competition. They might survive in some form but not as the world straddling giants they are now (anyone remember Kodak or Polaroid?).

    Another thing to consider is the religious aspect of the switch away from oil. Right now we care about the Middle East because that’s where the oil is. But when the world no longer needs oil the Middle East becomes unimportant politically, especially Israel, who a lot of Republican conservatives care about. Sometimes I wonder if this is one motivation for their denial of global warming, without oil who would care if Israel survived?

    • JoAnn Leichliter says:

      The Middle East is, for all intents and purposes, of declining importance now. The United States has enormous reserves and is only beginning to flex its muscles.

      But the Israel issue factors in how?

    • Let’s follow this thread.
      1. The oil industry has the money to buy their way into electric.
      2. Electricity is hard to monopolize, and therefore less profitable.
      3. But they can still buy them… To expand on what Wolf said, “if you can’t beat ’em, buy ’em. And then shut them down.”.

      They COULD try to take over electricity storage. From my understanding, lithium mining is in the hands of such a tiny group of men that it makes the oil world look like socialism. (I may be over-stating it some. Not sure)

      • George McDuffee says:

        RE: 2. Electricity is hard to monopolize, and therefore less profitable.

        Remember Enron and California…

        • Exactly! Failed quickly and spectacularly even WITH massive fraud and a monopolistic distribution system. But electricity? Psh! I can make that in my garage with cheap off-the-shelf parts! There are too many methods of generating and storing electricity that are in the public domain. Without subsidies and/or economic dams (ie, the cost of an off-shore oil rig, or an army to invade an oil-region) there is no way of supporting their bloated forms, regardless of whether they buy a battery company or not. The only thing that gives me pause is the fact that our government is addicted to exactly this style of capitalism, sees it as our very wealth and identity, and will probably do anything to preserve it.

      • BTilles says:

        Hi ChangeM,

        The only thing I would add is the concept of relative scale. Oil majors are typically much larger than comparable electric companies.

        • That’s my point. They’re big enough to buy, and kill virtually any competition. They have before, and I don’t think they have much choice but to try again, it’s too late and the emerging ecosystem is completely incompatible with them. It will be fun to watch the newborns devour their still-living corpse. >:)

    • Kchiggs says:

      Renewable fuel sources are never going to replace oil feedstock for asphalt,synthetics,chemicals and pharmaceuticals. Still that’s what 25% of oil?

  4. TheDona says:

    They already have a plan B for the future. Butanol fuel (which can be used in regular gas cars) and storage of the energy from Quantum dots for electricity eventually. Meanwhile BP and ExxonMobile will ride this oil wave out another couple of decades or until war becomes too expensive.

    I urge your readers to look at the the history of ExxonMobile and BP. Scary stuff. You can trace most Middle Eastern wars on whatever country they are exploiting, wanting to keep more of the royalties or to nationalize it. There are so many worldwide interlocking subsidiaries and joint ventures that it makes your head spin. So all of these sanctions mean nothing. One of the subsidiaries can still trade. Smoke and mirrors.

    The EV car movement is for affluent urban areas only. Limited audience. Irony of China trying to lead the way is because most of their electricity comes from coal which they have plenty of. Which is a bigger polluter…gasoline or coal? Keeps them less dependent on importing.

    Rant over. LOL

    • Petunia says:

      Call me Capt. Obvious, but the new silk road between China and Russia is the conduit for buying energy from Russia. The Chinese don’t really need the US if they have ties to Russia and Iran. Once you subtract Chinese demand, it’s cheaper energy prices in the rest of the world, unless US manufacturing really ramps up.

      • BTilles says:

        Hi Petunia,
        Maybe I’m also Cap’n Obvious but I think the new energy Silk Rd goes China-Pakistan-Iran-Africa,with major energy capex along the way from the Chinese.

    • Kchiggs says:

      The last wells to wheels data, I saw suggested it was gasoline cars.

      The centralised static nature of coal plants allows mitigation technologies that are not feasible in cars. Btw the large chimneys to disperse the cases higher is why steam locos are exempt from emissions controls and diseal are not.

      The different combustion types simply allow different reduction methods.

      Of course oil powered electric is better, gas powered electric still and renewables best.

  5. Kent says:

    “For the electric industry, the irony is that they’re trapped in a different conceptual “box” involving legacy nuclear and fossil-fueled central-station power generating facilities. ”

    It is not just oil and electric companies being trapped in a conceptual box. Our entire country is. The USA was built on cheap coal, oil and invented the nuclear industry. To a great extent, it is what we do (along with banking).

    The average American has a very difficult time imagining actually owning an electric vehicle. Or powering them with their own solar panels.

    Fossil fuels was what made America great in the first place. We won’t be able to switch. China will come up in the age of cheap renewables and aren’t wedded to old ideas. That’s why China will be the masters of the coming generations.

  6. MF says:

    It’s not electric vs. gasoline. It’s oil vs. coal vs. methane.

    Electricity is not a fuel type; it’s a delivery mechanism. Fuels of all types, + solar & wind can be used to create it. However, solar and wind are just efficiency extenders. By using a small portion of each barrel of oil we pump to build windmills and solar panels, we can ultimately make that barrel do more work.

    Fossil fuels are what the world runs on, regardless of whether they get converted to electricity before final consumption. Gasoline may be a loser, but some other type of fuel (methane for now) will be the winner on the other side of the equation.

    • JoAnn Leichliter says:

      Point well made, MF. And then there’s all that plastic and (in case you didn’t know it) all those petroleum-based household products and even medicines…

  7. NotBuying says:

    This article is clearly biased from outside “contributors”. Electricity doesn’t come from magic fairy dust, it’s derived from energy production, which usually involves the production of heat to drive generators. The most efficient energy producer is nuclear (fission), it requires very little resources to create a ton of energy. Behind that is fossil fuels and hydro. Hydro would be the best option if is were feasible everywhere, but it isn’t. Coming in LAST place for energy production efficiency is solar/wind. In the last several decades, the world’s scientists have yet to create something that produces enough over the long term to justify the amount of work it takes to build them out. And the only answer they have to the intermittent production problem is to “store it in batteries!” While many articles will tout that solar and wind are the most efficient, they fail to recognize that the sun and wind are not as efficient at producing energy as all other production mechanisms.

    The worlds petroleum producers are best equipped to solve energy production issues. If they found a way to make wind/solar profitable (aka feasible), they you can believe they will drop their dependency on oil. If they don’t, someone else will. Tesla seems to be the only company in the private sector that is aggressively pursuing this, however I do not know if they are attempting to increase the input/output efficiency of renewables, which continues to be the main issue with these methods.

    • Wolf Richter says:

      Nuclear power is the most expensive way of generating electricity, especially once you include the costs of decommissioning the plants and nuclear waste disposal. A big part of the costs and risks are born by taxpayers via various subsidies and guarantees.

      After all the problems we’re running into with our existing nuclear power plants, the ballooning costs of decommissioning them, the still unknown costs of nuclear waste disposal (which we haven’t even tried to do yet), the skyrocketing costs of building new nuclear plants, and the phenomenal costs of dealing with reactor meltdowns — after all this, why have these nuclear power promoters not yet gone into well-earned retirement?

      • d says:

        which makes the most noise, an empty vessel, or an empty vessel in denial?

        Every time you post a Green energy related article, the comments get very noisy.

    • BTilles says:

      Hi NotBuying,

      I kinda get your point about energy conversion efficiencies. But my point is that assuming both fossil and renewable power generation had identical capital costs, only the former has huge operating costs. Game over.

      • ArcticChickens says:

        The idea that renewable power has no operating costs is disingenuous and naive.

        They both have identical capital costs until intermittent renewables reach a certain saturation, after which ‘smoothing’ the supply via storage becomes a necessity. This has mostly not cropped up yet because the states and nations with relatively high proportions of renewables are connected to other states with traditional supplies. One of the ways this manifests is with negative wholesale electricity prices at times of intermittent renewable induced overproduction. In the long term this will harm providers – all providers, and start pricing out producers. Who can afford to generate electricity when they have to pay people to take it? This is showing up in subsidies to electrical producers as prices fall below the cost of production. Ultimately, renewables come with a “grid overhaul” cost that will number in the trillions of dollars range.

        Tacking (heavily subsidized) renewables onto the grid and praying for the best is not really a solution.

        • BTilles says:

          The idea that renewable power has no operating costs (apart from depreciation and maintenance is, and we appear to disagree, obvious. The cost difference between shoveling coal, gas or uranium into a ‘boiler” for thirty years versus utilizing the blowing wind and shining sun–i don’t get why this is difficult.

        • ArcticChickens says:


          I do agree – the sun and wind are free. What isn’t free is the cost of making that power available when it is needed – the sun and wind are on their own schedule. Because of this, the installation costs are nuch higher than they appear, and operating costs are also higher – supply smoothing infrastructure is not cheap.

    • Crysangle says:

      Nuclear is no better on energy returns than solar

      And there are comparisons elsewhere where home photovoltaic calculates cheaper pricewise than grid for certain areas. Here is the meaning of efficiency for electric vehicles in terms of CO2, not a completely level comparison but in terms of fossil fuel usage it should be not too far off … at worst even with gasoline accordimg to some others , but not relying on oil either so some choice there…

    • Flying monkey says:

      Nuclear still relies first on converting heat to steam.

      For safety reasons it is done at a lower pressures and temperatures than a conventional power plant. The higher the pressure, the better the efficiency since you have a “fixed” cost of first converting the water to vapor gas (latent heat of water, 2250KJ/kg). To maintain a closed system, the water is condensed (in cooling towers) and that heat is given up to the atmosphere.

      Combined cycle turbines might extract maybe 62% of the energy in the fuel. Conventional high pressure steam plants might extract 50%.

      Any power plant running at lower pressures and lower temps will also have lower efficiencies.

      Nuclear might only have a much higher energy density than other fuels, but it cannot be used as efficiently as other fuels for safety reasons.

  8. 2banana says:

    Electric cars = tax subsidized expensive toys for the rich powered by coal

    • Wolf Richter says:

      There are no more coal-fired power plants in California.

      • BTilles says:

        Being of generous spirit I would award 2Banana partial credit on the theory that these Tesla owners alluded to lived in coal-powered West Virginia.

      • Bookdoc says:

        No, but they do buy a fair amount of power from out of state.

      • max says:

        Average retail price (cents/kWh)

        California 15.23

        U.S. Total 10.27

        • Wolf Richter says:

          There are many reason why retail electricity costs are high (but are not the highest in the country). Among them: We’re paying for one dead and one dying nuclear power plant. The costs will dog rate payers for a long time. We’re going to be paying for the damage done by the catastrophic wildfires that are deemed to have been caused by the electric infrastructure. California is expensive all around (look at housing!), and electricity is no exception.

          And BTW, Texas produces more wind power than any other state, and has low electricity costs.

        • BTilles says:

          Hi max,

          I think about a particular utility’s prices like the lines and wrinkles on my no longer young face. They reflect what I’ve done and what I’m doing. Same for utility prices. They reflect the sum of past (but still recoverable) and present investments still actively serving the customer.

  9. Bookdoc says:

    I’ve got to add something-every figure I have seen is that electric cars are less than 1% of the cars sold in this country. I sold at a dealership that handled electric cars and hybrids and we had an assignment weekly for the to be dusted and checked for spiders and the like as well as if they needed a charge-they do run down even when hot in use. In the 2 years we had the Chevy brand, we sold, I think, 2 and one was for a university test. Electric cars have been around a long time (Henry Ford had one for his wife so she wouldn’t hurt herself cranking a Ford) but are still limited by the nature of batteries. They also use a large amount of necessarily imported rare earths (can’t mine here due to the EPA) that can be cut off. Give me a car I can drive, refill as needed within minutes, and i’m fine. I have a funny feeling 90%+ of Americans seem to agree with me.

    • BTilles says:

      Hi Bookdoc,
      You assume you’ll have a choice. In Denmark, for example, they have banned the sale of all fossil fueled autos after 2030.

      • ArcticChickens says:

        Sale of new, or all transactions? Seems to me it’s a good way to create a Cuban style market where people simply keep their cars going for as long as needed – forever, if necessary.

      • Kchiggs says:

        Denmark is also much smaller then the US,has a much more viable public transportation and well diseal cars can be brought over the border easily.

  10. Crysangle says:

    Demand for fossil fuels will remain globally, there are many circumstances where there is no replacement, and there is a large share of global population that will take up spare supply. The question of how producers adapt to these changing patterns of demand are something else.

    The US does not make much sense from the point of view of importing large quantities of oil, running trade deficits, just to entertain what some would call an unnecessarily wasteful use. JoAnn above has not done her figures, the US has high production now but reserves in terms of domestic use at current rate are very small.

    Nuclear is not a good option for the various reasons stated above, in fact centralised production is not ideal either.

    So a move towards the efficiency of electric vehicles, to high efficiency ICEs and so on is overdue, particularly for the US which uses such a disproportionately high share of global oil and also has the wealth and organisation to effect transition. You aren’t going to be selling EVs to many regions of the world for a long time due to practical restraints.

    I actually personally prefer ICE autos, especially less complex versions, but I prefer solar energy for electricity hands down to grid (ok, it is better the further south you are). So high efficiency combustion engines would be own next choice, or some very basic EV running on a standard chassis for the kind of off road I encounter, neither too much worth it though given I use a smaller efficient car – if a smaller auto two decades old gives double mpg as standard compared to the average new vehicle in the US, well someone is buying more heavily taxed fuel I guess :-/ .

    Even if US manages to secure and afford oil supply into the future, dependence is not exactly a strength.

    • MCH says:

      Actually, I’d argue that strategically it makes a great deal of sense for the US to use resources from elsewhere. First, there is the NIMBY argument that is popular with everyone. But far more important is when those sources actually start to deplete, the US will be in a commanding strategic position. I’m not just talking about oil, mind you, there are a whole host of resources that the US imports that could be retrieved here. The reason we don’t is both financial, and strategic.

      Imagine the day the ME runs out of oil and gas. Then is anyone on the planet going to support those guys? They’d all be abandoned in no time,

      • Crysangle says:

        Yes, I see that argument very well. At its harshest it just looks like imperial plunder of existing finite resources, making sure home nation outcompetes other would be users, and potential adversaries. At best you can call it optimal allocation of those resources in a peaceful global market, where the US has traded itself into place by superior management and innovation.

        Even more complex is the geopolitical ambition that goes hand in hand, but aside, from that. That might include securing trade routes, forming global dominion by platforming bases in countries allied via oil based trade, and so on.

        The middle east technically trades its position by selling oil. There will be incentives to maintain ties without oil, just as in about every country globally there are endeavours at establishing western influence. However middle eastern countries will lose much of their priority once oil is gone…and likely competitor nations will neither be overly interested in them. In reality though, the world works quite differently in long term. So we have seen different pushes at regional integration, from GCC to military to political still on-going, stretching often into Europe and parts of Asia and Africa. How that shapes up, its continental relationship, is a bit of a guess. The middle east will be left with some natural energy reserves to see it on, in fact own consumption alone might squeeze out supply to the rest of the globe at some point.

        So it is hard to make a proper judgement… but still, being reliant on a high level of imports, in itself, is not a strength…you have to guarantee that supply in an always unpredictable international setting or else there is upheaval.

        • MCH says:

          I would say that is especially true if a country doesn’t have the natural resources to start with.

          It is also true that the problem is infinitely more complex especially if you have to take time and costs into consideration.

          Using the RE example, there is ample RE within the US, extraction is a environmental and economic problem. Not an availability issue. But here geopolitics will come into play at some point. Which makes the problem even more complex.

          But take a country like the US, and suddenly isolate it permanently from the rest of the world, it is likely able to meet most of not all of its own resource requirements given enough time and money.

        • Crysangle says:

          I agree. The main problem is this :

          If you get an oil shock for example, then it straight off messes up the economy of the nation, and politics. This could literally be disastrous if a nation is already unstable in some way, say socially. It is no joke. What is more it pushes that nation into a position of wanting to resecure supply, hence it enters into war .

          Aside from that the tendency, if the aim is to maintain current imports and without there being a shock, is to aggressively seek to maintain dominance of the foreign supply system. That means wars are fought or encouraged where any other nation ever tries to exercise its natural right to use leverage of own supply, or where it in any way gets in the way of the wanted future structure.

          So just to say ” If we have to we are able to ” does not change the effects and liabilities a country exposes itself to by not making available changes when they are presented. It is a choice with many variables affecting it, but a choice all the same.

  11. Genset says:

    With regards to the op or title, beyond petroleum, a new source of energy is required.

    And until that comes along…

  12. MCH says:

    In terms of energy, the use of solar and wind looks good from a PR point of view, and yep, there has been huge improvements in the efficiencies of those technologies. But in terms of how clean they are, I would argue that they aren’t any cleaner than oil or nuclear. Their environmental impact is just different, and I would say rather underplayed by environmentalists in general, and there is a huge NIMBY effect here.

    Solar and wind are just environmentally damaging in different ways. Consider for example, solar, some of the key ingredients in solar are cadmium, chromium, and other highly toxic metals. When CA was actually producing solar panels in the late 2000s, the materials in use were actually quite toxic. Take thin film solar products that was the rage for a while during that time, it was primarily made out of CIGS (copper indium Gallium selenide), some of those are highly toxic metals with lots of left overs. This doesn’t even begin to cover when these panels eventually need to be retired, good luck finding landfills for those things.

    Then there is wind. Wind is supposed to be safe until you consider the environmental costs of extracting the raw materials, especially the rare earth materials needed to make the magnets, primarily neodynium and parseodymium. Literally just type in the words rare earth mining and China in Google, and take a look at the picture of what it takes to pull this stuff out of the ground. This doesn’t even begin to take into account the EV world, and the magnets as well as the Lithium ion batteries that you need to make those cars.

    The difference of course is that these environmental problems are more localized, and really doesn’t get a lot of press. If the US has to mine its own rare earth, holy smoke, then the Sierra Club and all the other environmental groups are going to come out against it. But if it’s in China or Australia, well, nobody really cares. Then of course, there is our wonderful media, who would suddenly not know what to do with the renewable narrative if the real environmental impact of solar and wind is put forth. No reporter in their right mind would focus on the negatives of renewables. Nobody likes to be a heel.

    Overall, no matter which way we go for our energy generation, we’re kind of screwed, it just depends on how we as a species would like to get screwed.

    • BTilles says:

      Hi MCH,
      I get your point. But the filthiest plants by your reckoning are actually hydro dams because of the enormous energy inputs, cement, diesel etc. More broadly we can agree the metal fabrication pricess is also environmentally fraught. But, that’s where the similarity betw renewables and fossil-fired generation ends. Turn on the coal plant and there are toxic emissions until the day it’s retired. A wind turbine or commercial sized solar array emits bupkis.

      • MCH says:

        If the only criteria is about emissions, I would agree. But that’s basically not taking the entire picture into account. If we end up poisoning the landscape but have no emissions concerns, well, isn’t that just trading up one problem for another.

        • ArcticChickens says:

          To add on to that, we externalize the toxicity cost of these renewables to China in exchange for cost. Just about 20% of China’s farmland is contaminated by chemical pollutants! Solar in particular is a huge contributor – the reason solar panels from China are so cheap is because of lax chemical waste processing regulations, and there’s a lot of chemical waste involved in producing solar panels. On top of this, China uses more (and dirtier) energy to produce their solar panels. One study found that Chinese solar panels would have to be in service 20-30% longer than western counterparts to make up for the doubled energy inputs during fabrication.

    • Wolf Richter says:


      This rare-earth argument against wind power is bogus. All power plants except photovoltaic solar and fuel cells use electromagnetic generators, whether they’re driven by a wind turbine, a steam turbine (nuclear and fossil fuel), a gas turbine (natural gas) or a water turbine (hydro power). The simple fact is that electromagnetic generators is what we use to convert motive power into electricity.

      The only systems that don’t use generators with magnets are photovoltaic solar and fuel cells.

      So that rare-earth argument against wind has been DOD from day one, and it’s time to bury it and leave it buried.

      • MCH says:


        Interesting. What is the amount of RE that is actually used in the standard power generation system I wonder. I assume there is going to be some variation compared to the amount of RE used to produce a similar amount of wind power. I would guess it would be difficult to tell without knowing the exact BOM for a wind turbine, or a standard generator. It would be an interesting comparison.

        It also makes me wonder how much RE is actually used in EVs vs ICE types of vehicles. Granted, the EV volumes are minuscule compared to ICE today. But that will factor into demand for electricity as we move to higher # of EV.

        • Wolf Richter says:

          Yes, there are lots of good and valid reasons to argue against any and all forms of energy that humans use and waste. Nothing is clean or perfect or risk-free. There is always a price to pay for human use of energy.

          Conservation is still the best method as a first step. After that, we have to prioritize, in the sense of what is less bad than the other forms.

          In terms of EVs, most people (me included) who are in the market for an EV are so not because it’s “green” (as you point out, there are lots of less-green aspects to EVs), but because electric motors are a superior way of powering a vehicle (flat torque curve, no idling, regenerative breaking, practically maintenance free, long lifetime, etc.). The battery is the remaining handicap. But they’re getting better every year. So we’ll hang on to our 11-year-old ICE-car for a while longer.

        • MCH says:


          it really all comes down to economics for a majority of us. We lease a 2015 Leaf right now, and depending on it will probably do another lease next year. But for commuting to work, the electric bill is comparably less what we’d have to shell out for gas on a monthly basis.

          But going off on a tangent for a second, the real way to solve a lot of these problems is to have less people. I think you pointed out the fact in another post that from the time you were born to today, human population have nearly tripled. From the scientific point of view, we’re pretty much like a virus, and there is no way to sustain this level of growth. The inevitable question is how that growth will be curtailed, whether people does it themselves, or if there are external factors that drive this curtailment.

        • Wolf Richter says:


          Most def yes to your statement on population growth.

          I have a friend who leases a Leaf. Drives from SF to Novato every day. He has a version with a smaller battery. So he charges it every day (charging station). He loves it. Says it saves him a ton of money. I think the juice was free for the first year, if I remember right.

        • Kchiggs says:

          Depends on the black start capability. Independent generators need them, however grid scale turbines do not.

          Germany’s enercorn uses the same electromagnets to build rare earth turbines,only small scale, grid independent, power storage free systems need them. Most wind farms can manage without.

          AC type EVs can be built rare earth free for the same reason, while DC needs rare earth, so it really depends on which motor wins. AC has slower acceleration than DC though.

          We should also see a lot of neodynamium become available once current hard drives are replaced with SSDs. Certainly enough life in them for household turbines. It is a travesty that they get sent to landfill while more rare eaths are expensively mined. OF course it’s cheaper than paying for the environmentally friendly recycling process.

  13. unit472 says:

    A cheap electronic watch will keep better time and cost 1/1000th of a Rolex but people still want mechanical time pieces.

    I think, once the novelty ( and subsidies) wear off, people will feel the same about EV. The hassle of charging them and their limited range will outweigh their putative advantages absent a dramatic drop in cost. At the luxury end of the market the sound and response of a precision engineered internal combustion engine will, like Rolex or Piaget, leave this end of the market to the IC engine. No one wants an electric Porsche or Ferrari.

  14. Petedivine says:

    Let’s assume the auto industry migrates to electric or hybrid cars overtime. It would be unfortunate for the American consumer. American shale companies produce light tight oil which is good for making gasoline. Most of today’s newer electric plants use natural gas. A lot of natural gas is a byproduct of petroleum exploration. As more demand is placed on natural gas it would quickly become more expensive. There hasn’t been a nuclear plant brought online since the 90s. There are a few multi-billion Dollar partially built nuclear flops attesting to their high price tags. Battery technology requires a lot lithium and rare earths, all of which must be mined and processed which of course brings us back to increasing petroleum consumption. Another heavy consumer of petroleum products is the agriculture business. They need to power up big machines and they need mined fertilizers like potash. All that heavy work requires petroleum. Lastly, electric cars don’t address the just in time trucking business which uses a mix of gasoline and diesel fuels. Sadly, petroleum is the most efficient and delivers the most work relative to other technologies. There isnt a substitute for petroleum and the myriad uses and products produced by petroleum. My guess is that we will continue to have a balanced mix of fuel sources well into the foreseeable future.

    • Crysangle says:

      Population density as a big aside, there is no reason that way of life cannot take a big step back but still come out ahead. Reduction of the consumer mentality and run run to more durable and traditional methods which incorporate the technological advances we now have is very feasible. You go from trashy glitz and ersatz to refined efficiency, durability and a common sense that people seem to want to outdo for some odd reason nowadays . The ambitions of our day are not always well thought out.

      As far as agriculture is concerned natgas is extremely important in the production of nitrogen fertiliser, for example India was thrown into crisis not too long ago as prices/availability changed. Here is an interesting overview of where that may or may not go

    • BTilles says:

      Hi Petedivine,

      I guess that’s where we disagree. Electricity is the alternative to petroleum. At what pace does the transportation infrastructure migrate towards increasing electrification? That’s the issue.

    • Kchiggs says:

      Actually inline hybrids deliver way better efficiency than any ICE drive. Already there are commercial uses for buses, I suspect either trains or trucks will be next.

      The diseal generator charges a battery, to run a motor( regenerative braking, and using the battery for hearing,means s lighter vehicle with a smaller engine.

      The system means a saloon car can be powered by a ride on lawn mower engine with out losing any of the speed.

    • Kchiggs says:

      Who says EVs need batteries?

      There have been Gyrobuses, compressed air storage, heat storage and fuel cell vehicles not to mention trolley systems that take the wire with them.

      Petroleum is far from the most efficient, it certainly is the quickest, most portable and ICE compatibleof the high energy density options (coal is a higher density and there have been coal powered steam cars historcally)

      Woodgas vehicles are still viable as well. They seem like a much better contender in some rural areas of USA than EVs. Wood is much more plentiful there than elsewhere.

      I suspect your right one size does not fit all, just like how we use a mix of fossil fuels.

  15. R Davis says:

    “Academic research show that large business organisations often know well in advance that the times they are a-changing”

    & so they wrap themselves in a safe cocoon of swaddling cloth & hide till they 11th hour drags them out in a fit of hyperventilation.

    20 years ago was the moment electric cars should have begun to replace the petrol guzzler.
    Watch the PROMO for the Holden VOLT – an Australian innovation – the glory stolen away & the project shut down as FAILED – a lie only.
    Still today they stand firmly in the dark ages when petroleum was GOD.

    • Bob Hoye says:

      There should be no subsidies for electric cars.
      Let market forces decide, not politicians and bureaucrats.
      Both not known for picking winners, economically speaking.

      • BTilles says:

        Hi Bob Hoye,
        Buckley: Let’s end subsidies (for the poor).
        Galbraith: Agree, let’s start with the oil depletion allowance.
        Buckley (frantic): Not that tremendous boon to the US economy-or words to that effect.

      • Kchiggs says:

        “There should be no subsidies for electric cars.
        Let market forces decide”

        Kill all subsides for oil well exploration too(unfair advantage to gasoline) and let the market decide. That will save 7.1 billion, kill renewable subsidy too and get 10 billion savings.

        In a true free market system EVs would dominate by now, the fossil fuel subsides are just keeping fuel that cheap and harming EV development.

        This is why the 1914 Detroit electric was viable in the pre subsidy era. No subsidies and the model t would probably have gone electric.

  16. Sinbad says:

    They have had a few name changes in their history.
    They started out in 1908 as Anglo Persian Oil Company(APOC) but changed it to Anglo Iranian Oil Company(AIOC) in 1935. Then in 1954 they became British Petroleum, and later just BP.
    Winston Churchill was one of the founding board members, and convinced the British Government to invest in the company. Originally they owned all Iranian oil bought for 60,000 pounds.

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