Within 5 yrs, oil companies will start downsizing their exploration and production. Expect some big layoffs in the oil industry...
$100 sez the reverse will happen.
Highly unlikely. The US is now the biggest exporter of oil in the world and fracking is opening up a new frontier in domestic oil production. With a rapidly developing third world thirsty for oil, you bet the US is going to continue full bore with oil exploration.
Almost 46% of the total crude oil is being used for passenger vehicles.
What do you think will happen once people start to use EVs?
Plug-in vehicles won't even be 20% of the market sales in the US 2020 - and even less so in the rest of the world.
Actually, Elon Musk predicts 17 years before the majority of cars sold are electric, so @satyrias, you might be a little ahead of the curve here.
Very ignorant statement on the part of the OP. Go google a list of products that are made with petroleum byproducts.
Contrary to (what seems to be) a popular idea here, big oil is not an opponent of Tesla or what they are doing on a broad basis. I work in oil & gas and all my colleagues are excited about me getting a Tesla and think the car/technology/company is great.
@ satyrias, that may be true but I think you'll find the vast majority of those vehicles are not premium priced luxury cars like Model S. We are very fortunate in that we are in a position to purchase or seriously consider purchasing a Model S. It's going to be a long time before economies of scale bring the cost down to something the average American in middle America can afford.
The Gen III doesn't count because it's vaporware, and we all know how Elon is prone to stretching the facts sometimes. So when he says he wants a Gen III car to cost half as much as a Model S and says "in the $30k range", I'm pretty sure that means $39,900 after deducting any potential tax credits. Add some decent options to that and you are probably going to be in the $50k range. The Gen III is going to be more affordable, but it's not going to be an "EV for the masses" by any means.
@ cv.randy, I concur. The only ones opposing Tesla right now are the car dealerships.
Yeah, I probably agree about the car dealerships. Although I doubt it's Tesla as much as what could happen if certain legislation is overturned. Tesla itself doesn't represent a threat to the establishment in it's current niche form.
If the bigger automakers (particularly luxury) were allowed to sell directly to consumers, that would be the bigger issue. I suppose if I owned a dealership I might feel the same way.
BTW, products made from petroleum:
If you aren't using any of these products that I commend you for your environmental stewardship. :)
"Very ignorant statement on the part of the OP. Go google a list of products that are made with petroleum byproducts"
What kind of job do you do in the oil industry to tell me that I am ignorant?
Do you have any statistical analysis on crude oil derivatives?
What is your education?
All the Japanese car makers will jump into the EV wagon very soon, before Telsa makes Gen 111.
They will tap into the 30K market very soon.
I work in statistical analysis...
Approximately 49% of our petroleum refining is gasoline(per the EIA). The rest is the other products mentioned.
Electric vehicle usage over the next 10 years is likely in the 10%-20% range in the US. Oil is traded and priced on a world market, so you have to factor demand in the entire world -- not just on US demand. Essentially if you converted the entire US to electric cars you'd drop demand by a maximum of 20% globally. That just isn't enough to 'crash' the oil business. You are talking about a product of limited (unknown) quantity, that the majority of the world will rely on for many years to come.
That's not even taking into account the fact that your (my) electric vehicle is fueled by electricity that in many cases comes from natural gas & coal. So that adds additional complexity to the demand calculations.
I'm not saying that one day renewable forms of electricity won't be the norm, but it isn't here yet.
The united states does not export oil.
Yes, but you can't factor oil prices in a bubble, it is priced on the world market.
Ooops, Sorry Mel, you weren't talking to me. My apologies.
randyy Do you ever get tired of hearing about all of the vast conspiracy theories regarding big oil and EVs? That said, what do you think oil co's will do as EVs start to have a material effect on gas usage sometime in the (hopefully) near future besides getting more aggressive on pricing and marketing? Find new uses?
EVs are just simply better cars in nearly every respect compared to ICEs In the long run, except for hobbyists who like exotic cars or that old 'Vette, the ICE will ultimately go the way of the horse and buggy, picture tube TV etc.
Go ev to preserve the small amount of oil we'll need for vitally important products in perpetutiy. We waste so much usin it for lubricant and gas in cars and machines. Want this resource to be available for much longer. Thus, big oil and all its legacy costs will not be required in emerging world economy. Just reality. Best thing for big oil is to invest in is renewable energy or tech that creates an efficient, sustainable use of petroleum. Who knows, might find a bigger market and higher margins there.
@oildeath I don't really think it matters until battery prices are in a reasonable place for a decent range. Like I mentioned earlier, I think developing and emerging markets will always be around and will always be using petroleum based products.
I don't value demand based on gasoline usage, but on oil usage globally. We've already lost a huge amount of refining capability in the US and it will increase. The refiners are already preparing a reduced demand for gasoline in the US, but refining less into gasoline you automatically create demand through less supply.
If you lower demand, it will lower the cost of oil. Which will then cause many kinds of oil production to become unprofitable. This will lead to a decrease in drilling in those high-cost areas, which will lead to less supply. Which will increase costs, which will cause the inverse of what I have just described. Supply and demand fixes everything over time.
Only 46% of the crude oil is being used for passenger vehicles, not 49% as you said in the above post.
You can see that, I am not trying to defend my perception here, if so I would have joined you with your 49% assumption.
Once the price of the crude oil goes down, the deep water drilling is not feasible. They tapped most of the shallow reservoirs in the past century. They went into deep water drilling in the last decade after the price went above $70 /bbl and hit as high as $140 /bbl. There is a break-even point for them to invest money in the deep water exploration. About 20 yrs ago the crude oil was about $12/bbl and none of the oil companies invested their money for deep water exploration at that time.
Japanese car makers will flood the Asian market and European markets with small EVs since they are the ones paying higher Gas price at the pump than US customers.. Currently, Toyota is buying EV power trains from Telsa and they will market small EV cars in the 25K market in Asian countries, like a Toyota Camry in this country.
Once the demand goes away and price of the oil falls below $70 /bbl, these oil companies will not be exploring into deep terrain. That is why I said there will be a lay off.
The current demand of Oil is from the Asian countries and that is what keeping the oil price close to 100 /bbl. It doesn’t need a full adaptation of EVs to lift that oil demands created in the last 10 yrs.
randyy, I think, you are correct . Oil cannot be priced in a bubble. The east coast of the united states pays the European price.
What is the purpose of this thread, anyway? Idle chit chat and hypothesizing about hypothetical situations that are not going to happen years or perhaps decades from now. This is hardly something that needs to be in the Model S forum - it has nothing to do with Model S. Also, the title of the thread is alarming to anyone who is perusing the thread topics, it seems to imply that there are going to be big layoffs (at Tesla) for anyone who doesn't read the thread but just looks at the topics. Just saying.
For our uses I won't argue 3% with you Saty.
If you believe that Japan, China, Brazil, India, etc will adopt wide-scale use of EV and diminish their usage of petroleum products that significantly then more power to you.
I would encourage you to analyze the lifting costs of oil production in places with large reserves other than your referenced offshore production. Cross reference that with the global reserves still held by middle eastern countries.
I don't think it's worth arguing about pie in the sky predictions. OPEC has reserves of ~1200 billion barrels, much of it with lifting costs below $10/bbl. You think they won't sell it?
Agreed Amped, I'll stop :)
@satyrias: would you mind to rename this topic (e.g. ...layoffs in oil industry) and/or move this topic?
@ampedRealtor,US is the biggest *importer* of oil, by far: