EV transition…. what EV transition…?

15 08 2017

It’s raining again, and all work outside has been temporarily suspended. Well that’s my excuse for hitting the keyboard again. And the more I delve into the future of this supposed transition to EVs techno utopians continually go on about, the less I believe it will occur. No one gets limits to growth, and therein lies the problem. I also found this neat document my readers might like to download. If you’ve been hanging out on this blog for some time. you probably already know what’s in it, but there are a lot of newbies joining DTM these days, this is for you…

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I have already exposed how limits to Lithium and Cobalt and other resources needed to implement a transition away from oil powered happy motoring is going to give manufacurers (and share holders) headaches in the future; but obviously the fans of electric motoring do not understand the disruptive effects of such an industry nor how it will decimate the oil industry, which itself will kill off the EV sector….

At first glance, getting rid of polluting cars sounds like a great idea.  The billions of such vehicles around the world that pump out noxious gases and CO2 are, we know, are major contributors to climate change.  Banning them at the earliest opportunity, then, must surely be a good idea. But, there’s always a but………

If the world is going to make the switch to electric vehicles, we are going to need a massive infrastructure spend to create the fast charging systems without which the country is going to grind to a halt.

For most journeys – those of less than 10km – charging up at home overnight will do the trick.  But, Australia in particular.  is a nation of commuters who average around 1500km a month.  I know people who commute even further from where we used to live in Queensland….. Anyone driving more than about 70km to get to work is going to need somewhere to charge up before going home; and anyone driving more than 160km is going to need a fast charging station somewhere along their commute.  On the few times a year that many of us make far longer journeys (such as on long weekends) we would have to be able to stop several times to recharge – Australia is a big country. It’s either that, or we won’t be going away…..

And all of those other holiday drivers will all want to use the same “fast” (they currently take 20-30 minutes) chargers. I see melting circuit breakers…….

Add to this the fact that new oil discoveries have been plummeting and, without prices north of $200 per barrel, unlikely to bounce back, and it tells us one highly unpleasant thing… petrol and diesel prices are going to bounce back a few years from now, once the current glut is over.

That is great news if you work for an oil company or if you are a government that depends upon the taxes from oil exports to pay your debts.  But if you are a country whose oil industry is in terminal decline – like Australia that will have almost certainly totally run out of oil by 2020 – then you are about to find yourself competing for dwindling oil supplies against far richer countries like the USA and China.

Back in the real world, coal plants are shutting down, nuclear companies are going bust, the so-called ‘shale revolution’ is teetering on the cliff edge of collapse, and there is simply no way given the current state of technology for renewables to take up the slack.  What we are facing today is figuring out how to maintain the current supply of electricity, and the last thing anyone needs is the massive increase in demand that will inevitably accompany the mass consumption electric cars.

Electricity shortages may, however, prove to be the least of our worries.  Too many electric cars could trigger a global economic collapse.

Few pundits now doubt the benefits to consumers of electric cars compared to petrol (gasoline) powered ones.  A recent article in The Economist observes:

“Compared with existing vehicles, electric cars are much simpler and have fewer parts; they are more like computers on wheels. That means they need fewer people to assemble them and fewer subsidiary systems from specialist suppliers…

“With less to go wrong, the market for maintenance and spare parts will shrink. While today’s carmakers grapple with their costly legacy of old factories and swollen workforces, new entrants will be unencumbered. Premium brands may be able to stand out through styling and handling, but low-margin, mass-market carmakers will have to compete chiefly on cost.”

Sounds like job losses to me….. and who will buy EVs if they don’t have a job?

What would mass ownership of EVs do to the already struggling global oil industry?

The existential threat posed by electric cars is simply that they might force the price of petrol (gasoline) to zero.

In 2014, the world burned 41,235,000 barrels of petrol (gasoline) every day!  If no one wants the stuff,  and as there is no obvious alternative use for it with maybe the exception of some power tools and hobby engines, cars and light vans are the only place where petrol is consumed, why would the industry make petrol?

“Great,” I hear the greenies shout, “just stop producing the filthy, environment-destroying stuff.”  If only it were that simple.  The trouble is, as Michael Schirber at Live Science reminds us, oil is a chemical potpourri:

“Petroleum is not a single molecule but a mix of thousands of molecules, the most important of which are hydrocarbons. These are chains or rings of carbons atoms surrounded by hydrogen atoms.

“Although gasoline comprises nearly half of all petroleum production in the United States, a wide range of fuels and specialty oils come out of a modern-day oil refinery. The petroleum is first heated in a boiler to separate the smaller hydrocarbons with low boiling points from the larger hydrocarbons with high boiling points.”

Oil refineries can’t simply stop producing petrol (gasoline) without also ceasing production of all of those other far more useful products…. like those used to manufacture tyres, and bitumen roads..!  Both required by the EV revolution…. Lighter gases are used in such things as paints, cleaning agents and as chemical feedstock.  Heavier products include the kerosene that fuels jet aircraft; diesel for our heavy machinery and trucks; lubricating oils and greases for industry; and solids like the aforementioned bitumen.  One assumes that, like the rest of us, the greenwashers would quite like all of these other petroleum products – and the things they do for us – to be available after petrol has gone away.

And therein lies the conundrum; because petrol effectively subsidises the price of all those other products.  Even the pro-electric car Economist article concedes that:

“The internal combustion engine has had a good run—and could still dominate shipping and aviation for decades to come…”

Except of course, the oil industry is on its knees, and once it goes, so does the dream of happy electric car motoring……

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25 responses

15 08 2017
xoddamnahtanoj

I don’t really see the problem here. A lot of applications which once depended heavily or exclusively on petroleum have switched to gas, coal or electricity since the first oil crisis. Energy is becoming more fungible, not less so, in the face of electrification. If the price of petroleum were to collapse due to a collapse in demand for liquid fuel for light vehicles, many of those industries would simply switch (back) to the new cheapest fuel supply.

Petroleum refineries can and do adjust their output product mix according to demand. Bitumen (for roads) and olefins (for plastics and synthetic rubber tyres) might be considered low-value co-products today, and sold at a relatively low price, but refineries would have little trouble selling them at a higher price and producing proportionately more of them if there were less demand for the mid-weight hydrocarbons. Indeed one of the great challenges of refining in recent years has been cracking and desulfurising heavy and “sour” oil fractions (basically, bitumen) into lighter and cleaner products for cars and aircraft. It’s an energy-intensive and expensive process. Doing less of that, so that proportionately more heavy “by”-products are delivered, would certainly be viable.

As for declining employment prospects as we consume less fossil fuels as primary energy … isn’t this the very de-growth you’ve been calling for? If we really do observe the sort of gross surplus of labour seen in the Depression, we must adopt the solutions that worked in the Depression: public employment in public works and the sort of “war effort” that will be required to completely decarbonise the economy, all the way.

15 08 2017
ejhr2015

“we eat oil” That means without it we cannot produce sufficient food to sustain our population. Oil @ $200 a barrel will not sell, although governments might buy enough to keep the lights on. Oil at $40 a barrel drives producers to bankruptcy, but Governments will subsidise them to keep food on the table and the lights on. But it will all break down eventually.

15 08 2017
xoddamnahtanoj

Of course oil will sell at $200 per barrel. Just less of it than sells at $40. Again, I don’t see the problem. We *want* to use less, and we now have the means to achieve more with less.

15 08 2017
Mark

In the early years before petrol became the fuel of choice, excess petrol was dumped into rivers as it was originally considered a waste by product.
Then petrol took over from alcohol and the current situation became the norm.

The biggest problem with a collapse from lack of oil will be the masses of unemployed unable to afford basic heating etc, let alone the cost of food if fuel costs what $200pb oil creates.
Also if fuel becomes scarce then it will be a long walk to the shops for many.

Add scarce oil to closing coal power stations, low gas supplies to huge wind farms and electricity will become unreliable.
Add high levels of unemployment & unhappy citizens and we are in for interesting times. Because there is only so much the service industry can do, especially if the back room jobs keep getting offshored.

Currently we rely on easy oil to maintain power lines, roads, bridges and other infrastructure, there are multiple fuel stations, repair shops, spare part shops and a huge range of brands to choose from.
That will largely evaporate when easy oil is gone.

have a safer one.

16 08 2017
Dennis Mitchell

The whole picture will be different than projected. We have to throw in economic collapse, climate disruptions, population overshoot. Without jobs we will not need to travel long distances. After massive starvation and a few “good” wars. An Ev transition just might work. I agree this technological la la land future is a pipe dream. People in charge will use what is cheapest, or of most benefit to the one percent, and will happily kill to make it so.

16 08 2017
mikestasse

The real issue is less to do with the numbers than with the energy/cost. As professor AS Hall – who first developed the concept of EROI – says, at an EROI of 1:1, you get to look at the oil; an EROI of 2:1 allows you to pump it to the refinery; 3:1 allows you to turn it into useful products. This is why the Canadian tar sands have ceased producing, why Venezuela is a basket case despite having massive tar sands of its own, and why fracking is only proceeding in a handful of sweet spots in the USA.

http://consciousnessofsheep.co.uk/2017/08/15/when-the-party-comes-to-an-end/

16 08 2017
xoddamnahtanoj

Who told you the Canadian citumen sands aren’t producing? Production has almost (not quite) stopped *growing* with the low prevailing oil prices, but growth could easily resume with higher prices. Production definitely hasn’t fallen, least of all to zero. There was a big temporary dip in May 2016 when some production was interrupted by forest fires.

(These numbers include conventional crude in Alberta as well as the bitumen sands, but bitumen is more than half of it these days).

http://economicdashboard.alberta.ca/OilProduction

16 08 2017
mikestasse

That’s what it says at the link…. he may have meant not prducing net energy…

16 08 2017
xoddamnahtanoj

*bitumen*, sorry for typo.

Ok, a direct quote of someone else’s mistake, not yours 🙂

Net energy from bitumen sands is absolutely lower than for conventional petroleum, but it’s way above zero. Poisson and Hall (of course!) have the lowest guesstimate, EROEI of 4:1 in their 2013 article which uses figures to 2008 only.

http://www.mdpi.com/1996-1073/6/11/5940/pdf

Wang et. al. have charts which *begin* in 2009 and show bitumen sands EROEI rising steadily from that 4:1 to about 7:1 in the years to 2016. That’s partly because techniques are improving, and partly because investment in new projects has dropped off with oil prices. Wang et. al. also consider steam-assisted (liquid) bitumen extraction, which is a bit more energy intensive but less disruptive to the landscape than sand mining. Its EROEI figures of course higher, but also rising.

http://www.mdpi.com/1996-1073/10/5/614/pdf

Note that these figures include energy coming from the resource itself, effectively “lost” in processing. That energy was consumed, yet had never been realised as a part of energy production figures. While that’s absolutely fair when considering resource depletion (though this resource is *vast*!) and pollution, it does not figure into the economic viability of the process as it comes at no separable monetary cost.

Remarkably, though it’s obvious that bitumen sands are more polluting in many ways than conventional oil, the difference in well-to-wheels CO₂ emissions is only 10% or so between the cheapest Arabian crude oil and the most energy-intensive in-situ steam-assisted bitumen extraction.

http://www.energytrendsinsider.com/2013/12/09/the-cost-of-production-and-energy-return-of-oil-sands/

16 08 2017
mikestasse

To be honest, I’ve see estimates of 2:1… and look at this…

https://damnthematrix.wordpress.com/2017/03/31/an-idiots-guide-to-the-eroei-of-tar-sands/

16 08 2017
xoddamnahtanoj

Yes. The waste is appalling and the scale is immense. The resource is large enough that extraction can probably be sustained at that scale for long enough to melt both ice caps. I’m horrified.

16 08 2017
gbell12

Mike, I’m less confident than you that all those dominoes will fall just-so to make your predictions true. It seems that if the product is available and people need it, markets will find a way to work – albeit at a different form and scale than now.

At $100/barrel, a lot of things change as far as recoverable resource. “But nobody can afford that.” Not true. I’ll happily afford that for the many things that only oil can provide – it’s just that I’ll be buying *less* of it. That may mean smaller oil companies, but operate they will.

16 08 2017
Bruce Teakle

i agree with Dennis (above). The key message is that we need to let go of the technotopian dream which is the usual framework for imagining a future with less oil. Our minds are so captured by images of American 1970s “Jetsons” futures, we are unable to learn from Asian (or all sorts of places) villagers who already know how to survive and be happy on a fraction of our resource use.
Electric cars require a massive investment of embodied energy in themselves, and additionally depend on a road infrastructure which also requires an astronomical concentration of energy, resources and affluence. Switching from petrol to electric cars, while maintaining the overall car/commute/zero-localisation paradigm, doesn’t help any of our well-known problems to the degree we require.
We truly can’t know how the energy descent story will play out for us, but we can be sure we will experience it as economic and social disruption (most people already are). Complex, energy-intensive and infrastructure-dependent technologies like electric cars are an investment in the fading dream and exacerbate the difficulties we face. Reviewing our paradigms and investing in resilience strategies such as gardens, bicycles, tools and communities might help us through a less traumatic transition – at least won’t make things worse.

16 08 2017
Paola Crawford

gbell12 – you would happily pay more (and buy less) if oil was expensive. I agree but the problem is that soon it will take more oil to extract it than what we recover! No matter the cost, there is no sense in expending 10 barrels of oil on drilling, trucking, processing etc if we only retrieve 5 barrels in return. Thats a negative return (not just financially) but in oil terms – Stephen St Angelo’s Rocco Report.

16 08 2017
xoddamnahtanoj

Fortunately, and unfortunately, it’s not that simple.

Every oil refinery processes 100 barrels of crude oil only to deliver 80-odd barrels of petroleum products to its customers. Each fossil-fuelled power station loses *at least* 40% of the heat energy produced by combustion as waste heat, delivering (a recent OECD average) only 38% of the fuel’s energy as electricity to the grid.

Leveraging non-petroleum energy to extract petroleum is already done on a large scale, eg. in Canada where cheap gas is burned to liquefy bitumen so it can be pumped to the surface. Not at a negative EROEI in this case, but a low one. It’s leveraging cheap energy to obtain a different fuel that fetches a higher price.

It’s getting easier over time to substitute one form of energy for another, and that applies within the energy industry just as much as outside it. Of course nobody will drill for oil at a negative return with respect to purchased oil products, but the unprocessed resource at the site of extraction has no external financial cost to someone in the business of extracting it, they pay only their own intermediate cost, so they’ll cheerfully burn it if it helps them extract more. They will also readily substitute other, cheaper energy forms for petroleum inputs. Most petroleum products are consumed by burning them in engines; and pretty much anything you can do with a stationary internal combustion engine, you can do with electricity, which can come from any energy source at all. You can also increasingly use electricity for transportation, of course with some caveats.

If we want liquid fuels at $200/bbl we shall have them, whether getting them has a positive net energy return or not. Existence proof: coal-to-liquids, as practiced already at large scale in both South Africa and China. It’s a pure energy loss of over 50% of the energy contained in the coal, but coal is cheap and liquid fuels are not. Well, $200/bbl liquid fuels are definitely not; nobody is investing in such facilities while oil is just $40/bbl, but it would be profitable if, say, $90/bbl oil could be assured for long enough to pay off the investment.

16 08 2017
Chris Harries

Regarding what the oil industry produces as side products, we shouldn’t underestimate the amount of hydrocarbon streams that are used now almost ubiquitously in the manufacture of clothing, shoes and a wide range of building materials. Does the Tesla have seats? Do their owners wear shoes?

Now that there are some 8 billion people in the world it is impossible to go back to natural materials, such as wool and cotton, for all of this, or we’d have to convert much agriculture away from food production. We’re in a rather tight jam.

Not that I’m advocating sustained use of fossil fuels, but we do need to get away from the simplistic romance that EVs will obviate fossil fuel extraction.

The problem is not that people are advocating a switch to EVs, the big problem we now have is that people, en masse, are seeing this transition to electricity as an end point and the portend of an idyllic future where we can motor away to our heart’s content and everyone will live happily ever after.

And – this is the most perverse part of all – this seeming victory just around the corner signals to all those in voter land that we are so close to jettisoning coal and oil that we can relax and get back to our consumer existence. Forging a new future is much, much harder than most peopler realise and it can’t happen without a cataclysmic rupture of our lifestyles and economies.

16 08 2017
xoddamnahtanoj

Stuff that’s made *out of* petrochemicals, and remains unburned, is much less of a worry than the atmospheric emissions from *burning* fossil fuels. Still quite dirty, of course, and likely to be burned eventually in a waste incinerator, but that hasn’t happened yet. (Of course there are emissions during manufacture of plastics, but they can be reduced considerably). Petroleum feedstocks are not scarce, but when prices were high a lot of investment went into using gas and coal as feedstocks instead of petroleum. A significant fraction of plastics made in China are now made using coal, not oil feedstock. As with synthetic liquid fuels, it’s also conceivable that we’d switch to electric energy, CO₂ and electrolytic hydrogen for plastics and other chemicals in a distant imagined fossil-fuel-free future.

16 08 2017
Chris Harries

Yes, Xod, but that’s not the main point. We were talking about the oil industry and the many streams of products that come from it, and that are being used for a wide variety of purposes. Yes, over time you can try to re-tool the whole hydrocarbon industry, but my industrial chemistry background tells me a lot about the composition of these hydrocarbons. When petrol is made a lot of other products are made alongside. Same for coal and gas.

When the oil economy goes belly up all of that gets tripped up too, unless a lot of new processing infrastructure gets put in its place. All of that takes big money and a slow transition as infrastructure is gradually replaced.

That goddammed Time thing just keeps coming back into the picture. It’s what ruins all those blokey dream about exciting new technologies will just sort everything out with the snap of a few fingers.

16 08 2017
Jonathan Maddox

I see no signs that the oil economy is going belly up. It might *shrink*, but Mike’s scenario of zero-priced petroleum thanks to EVs gutting the middle of the market isn’t a realistic one. Volumes could ultimately fall a lot, but asymptotically. They could not fall much below 50% of current consumption levels without exactly the sort of re-tooling you’re talking about, in multiple industries: it would take several decades. Prices could of course fall, but not below the extraction cost of the marginal barrel. It’s equally likely that prices will remain steady or even rise a little as demand declines: sane oil producers would cease exploration, cease most reinvestment, eke out their existing investments, pay off their debts, gradually hike prices as their resource dwindles, and return decent profits indefinitely.

17 08 2017
17 08 2017
Jonathan Maddox

A guy I never heard of, who used to make bets on the oil price with other people’s money for a living, just gave back the other people’s money because he’s no longer confident of predicting the price of oil.

I didn’t say the price of oil was predictable. I said that “I see no signs that the oil economy is going belly up” … what I meant was that I think oil will be extracted and sold for some time to come.

I do not pretend to know what the oil price will be in a month or a year. I never did.

17 08 2017
mikestasse

You’re leaving out the flow rates and net energy content….

17 08 2017
Chris Harries

Yes, we can speculate and we can rely on calculated intuition but we most probably won’t see oil markets actually go belly up until it does go belly up. Crashes happen and they are usually predicted by someone who is smart, but for the most part pundits don’t listen and hedge their bets that the status quo will remain… until it doesn’t.

17 08 2017
Jonathan Maddox

Crashes happen. And the underlying economy keeps going. People don’t stop buying essentials altogether just because the price changes or the suppliers go into receivership.

18 08 2017
Chris Harries

Again, Jonathan, you are suggesting the economies are bullet proof at the end of the day. Just like some say resource depletion is imaginary. We can print money and we can print solar cells by the million but if and when the net gain of each goes into negative territory then we are in trouble. Energy and money have many interesting parallels as dual life blood ingredients of our societies.

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