GRG 55 .........its a Bloodbath!

[Mega]

Re: GRG 55 .........its a Bloodbath!

I agree in that even I, a Petrol Head might very well jump ship.
I thought I would never give up on my beloved Yamaha two stroke bikes, but I did.
Its been a very long time since anyone has made a two stroke bike.....

While I dislike Musk his Model 3 duel motor has proved to be something of a game changer.

A few weekends ago I saw a bloke out in a Ferrari 550, lovely noise & he was "Lord-ing over everyone"...till he was joined at the lights by......you guess it.
No way he wanted to try his luck with the "Terminator"......I mean he lose & or blow his gearbox or engine trying. We all had a hearty good laugh at him.

However, we ARE about to CRASH head long into a Mega Depression, British Airways are talking blecky about fighting not to go bust. This tells me that they are nor expecting a quick "V" recoverly.

Mike

[Mega]

Re: GRG 55 .........its a Bloodbath!

THe Biggest problem for the car producers (other than Musk) is how to make a profit?
EV battery costs are large & its simply not going to come down fast enough.

Sure they can try to fight back with Hybrids & camless engines.......but their only hope is the Hydroen fuel cell & that would require a VERY large investment on an National scale.

[globaleconomicollaps]

Re: GRG 55 .........its a Bloodbath!

The Biggest problem for the car producers (other than Musk) is how to make a profit?
EV battery costs are large & its simply not going to come down fast enough.

Sure they can try to fight back with Hybrids & camless engines.......but their only hope is the Hydrogen fuel cell & that would require a VERY large investment on an National scale.

I thing everybody is going to be shocked at the capital destruction that will happen in a few months. Everybody will be very very poor for a long time. Hydrogen distribution networks will not be in the cards. Have you seen what cars looked like in the post war period in Europe? The micro cars like the Isetta, Messerschmitt and the original Fiat 500 were the best cars that people could afford. This was also a time when bicycles were popular as a transportation option because of poverty.

I'm not too worried about whether the auto majors will survive. If they make cars at all they will be electric and both the companies and the cars will be much smaller.

[Mega]

Re: GRG 55 .........its a Bloodbath!

Personaly I love to see a return to low power.
I mean I walk the dog & see people whom have bought or leased cars so big they can't fit on their drive way!

I recall my Renault 5 gt Turbo, stock was around 120 bhp, but mine made 135-140......not much by todays standards but the car only weight 900kgs!
It flew, I mean 0-60 in 7 or may be just under.

But it couldn't crack 125 mph.................now we have 175 mph Hot Hatches !

............& on Lease hire!...............Gee ............what could go wrong?!

[Mega]

Re: GRG 55 .........its a Bloodbath!

I see it being more like Cuba, VERY Old cars worked & reworked to keep them going.

Mike

[globaleconomicollaps]

Re: GRG 55 .........its a Bloodbath!

I see it being more like Cuba, VERY Old cars worked & reworked to keep them going.

Mike

What is the life span of an electric car? I understand that a prius has battery life of about 8 to 10 years. The prius will drain it's battery every time you drive it. That can't be good for the battery. A Tesla will mostly be recharged before the battery is fully discharged. What do the battery packs cost? BMW has a battery replacement program but I can't find information on it. This site says 8000. That sounds pretty do-able.

https://www.bmwblog.com/2016/05/12/b...de-make-sense/

What else might wear out?

[globaleconomicollaps]

Re: GRG 55 .........its a Bloodbath!

dup removed

[jk]

Re: GRG 55 .........its a Bloodbath!

one of the cars sitting outside my house is a 2005 with 177k miles. think i can get that from an ev?

[GRG55]

Re: GRG 55 .........its a Bloodbath!

Insightful comments, as always GRG. (43 yrs!)

...

The first of the cutbacks in production aren't coming from shale wells. The marginal "stripper" wells in the heritage fields (East Texas, Oklahoma, parts of New Mexico, Kansas, Montana, SD and so forth) are the first out. Much of that is (has) already coming off the market. That will be the first wave of the USA production declines reported.

As for who capitulates first that will depend on who suffers the most pain and which can stand it the longest.

In that regard, everyone already knows what I think, but here's some food for thought. Figures in US$ equivalents. Hydrocarbon portion is 2019 data.
As I posted before, what Russia and MbS just did was a head-shot to some of the OPEC producers.

Russian nominal annual GDP $1.64 Trillion (IMF, October 2019)
Russia average liquid hydrocarbon production (includes crude + NGLs) 10,603,000 bbls per day (January 2020)
Russian total annual exports ~$400 Billion
Russian crude oil exports ~$96 Billion
Russian refined products exports ~$58 Billion
Russian natural gas exports ~$20 Billion
Russian coal exports ~$16 Billion
Russian non-military aerospace exports ~$8 Billion

Saudi Arabia nominal annual GDP $780 Billion (IMF, October 2019)
Saudi average liquid hydrocarbon production (includes crude + NGLs) 9,748,000 bbls per day (January 2020)
Saudi total annual exports ~$180 Billion
Saudi crude oil exports ~$102 Billion
Saudi refined products exports ~$18 Billion
Saudi commodity petrochemical exports ~$28 Billion

USA nominal annual GDP $21.44 Trillion (IMF, October 2019)
USA average liquid hydrocarbon production (includes crude + NGLs) 12,971,000 bbls per day (January 2020)
USA total annual exports ~$1,645 Billion
USA machinery exports ~$206 Billion
USA electronics goods/computer exports ~$170 Billion
USA aerospace products and components exports ~$131 Billion
USA vehicle exports ~$127 Billion
USA petroleum exports (crude, refined products, natural gas, NGLs) ~$106 Billion.


And now a brief word from Igor (Sechin)
(but still looking for US shale to save him)

https://www.rferl.org/a/russia-sechi.../30500656.html

Russia's Rosneft Chief Downplays Rift With Saudis, Seeks Quick Oil-Price Rebound

[GRG55]

Re: GRG 55 .........its a Bloodbath!

I thing everybody is going to be shocked at the capital destruction that will happen in a few months. Everybody will be very very poor for a long time. Hydrogen distribution networks will not be in the cards. Have you seen what cars looked like in the post war period in Europe? The micro cars like the Isetta, Messerschmitt and the original Fiat 500 were the best cars that people could afford. This was also a time when bicycles were popular as a transportation option because of poverty.

I'm not too worried about whether the auto majors will survive. If they make cars at all they will be electric and both the companies and the cars will be much smaller.

Seems a bit difficult to make definitive forecasts ~5 years out at this time.
Exactly how are people going to afford to buy all these new EVs, given the capital destruction, the massive income losses (and long term income compression as a result of potentially higher structural unemployment), the lack of debt servicing capacity, and the rest of the fallout from a global recession that we now appear almost certain to be on the brink of?

one of the cars sitting outside my house is a 2005 with 177k miles. think i can get that from an ev?

Gasoline at the Kansas City, MO Costco today: $1.66 per gallon for regular (and I doubt that was the lowest in the land).

Personally I believe:
a) more people are going to hold on to their ICE cars a lot longer out of sheer economic necessity; and
b) battery EV will prove to be a dead-end technology.

$25 WTI is no motive for me to go out and replace my 237,000 mile 2010 GMC 400 hp V8 half-ton with an EV skateboard.

[touchring]

Re: GRG 55 .........its a Bloodbath!

$25 WTI is no motive for me to go out and replace my 237,000 mile 2010 GMC 400 hp V8 half-ton with an EV skateboard.

China is already cutting green tech subsidies. Since China spends the most on green energy. Indirectly, Russia is killing China's manufacturing with the low oil prices.

[shiny!]

Re: GRG 55 .........its a Bloodbath!

Could our response to Covid-19 cause a permanent reduction of demand for oil and gas? People who can telecommute are being asked to work from home. Tonight one of the anchors on the local news was broadcasting from her living room!

What percentage of the workforce can do their jobs from home with no loss of productivity? Is it big enough to make a dent in demand for oil and gas?

When this is all over, who would choose to go back to the daily rush hour grind, the traffic jams, all the wasted time, if they didn't have to? Maybe people who hate their spouse or kids, but for everyone one else, telecommuting could save them so much time and money! It could save businesses a lot of money, as well. If companies are willing to let it continue after the pandemic is over, wouldn't this cause a permanent reduction of demand for oil and gas?

[globaleconomicollaps]

Re: GRG 55 .........its a Bloodbath!

Seems a bit difficult to make definitive forecasts ~5 years out at this time.
Exactly how are people going to afford to buy all these new EVs, given the capital destruction, the massive income losses (and long term income compression as a result of potentially higher structural unemployment), the lack of debt servicing capacity, and the rest of the fallout from a global recession that we now appear almost certain to be on the brink of?



Gasoline at the Kansas City, MO Costco today: $1.66 per gallon for regular (and I doubt that was the lowest in the land).

Personally I believe:
a) more people are going to hold on to their ICE cars a lot longer out of sheer economic necessity; and
b) battery EV will prove to be a dead-end technology.

$25 WTI is no motive for me to go out and replace my 237,000 mile 2010 GMC 400 hp V8 half-ton with an EV skateboard.

Sure, I agree. People will hold on to their old cars longer. At some point you will be forced to get a new car. My old car is close to 10 years old now. It has all kinds of problems. I'm thinking of getting a new car right now but I'm holding on to it because I see the price of EVs dropping and they have just about hit price parity with Internal Combustion cars. This is Reinhard Fischer, senior vice president for Volkswagen Group who heads strategy for VW brand in North America:

"We strongly believe that the tipping point is near, and that tipping point will be price equity" that will drive new consumers to BEVs, not just early adopters.

"Once you overcome the fear of something new, the EV is the better choice for you,"

"I don't think it's going to take a lot of convincing," Fischer said. "There is a fundamental curiosity. Everybody sees the end state.

"When you put pencil to paper, owning a full-electric vehicle costs about half of what a gas car costs me to operate."

"Range anxiety has now been replaced by charging anxiety," Fischer said. But he said history shows that this problem will pass.

"A hundred years ago, gasoline was sold at pharmacies. Today, we have 122,000 gas stations in the United States. It's transformed from a bottleneck to a commodity," Fischer said. "Electric charging is going to be exactly the same."

So the price is now the same or within spitting distance and the main problem is that people are afraid to go on long distance road trips because the infrastructure is not there yet. My answer to that is, that the infrastructure for gasoline powered cars is disappearing. Independent gas stations have been closing for a long time. You mentioned that you get gas at a big box super store. I do too. There used to be quite a few gas stations around here. There are all closed now. I'm predicting that any that remain will be casualties of the depression. I also think that people will develop new habits. They will stay home more, take less trips for pleasure and work, eat out less, cut their own hair and burn less gasoline. Gas stations will be under a profit squeeze and they will not be in a position to pass the costs on to the consumer.

I don't think that the electric car will be the first choice for people trying to find their feet after a depression. That would be an electric bicycle. I was just saying to my wife that rather than get a new car I would like to get an electric cargo bike and park the car except for emergencies. I can do a week's worth of shopping with a cargo bike and the cost of a really fancy one will run about 4000 euros. This will also come down with time.

As for the future of the battery, time will tell. One alternative I am concerned about is that the ICE car is replaced by nothing at all.

[geodrome]

Re: GRG 55 .........its a Bloodbath!

What percentage of the workforce can do their jobs from home with no loss of productivity?

I am a software engineer. I love working from home. Been doing it for years. But I know many software engineers who hate it to the point where they wouldn't take a remote first job. They just can't focus at home. Too many distractions, they say. For some of them it's their wife or kids, for others it's just the fact that they're at home. They like the office environment, it's like a signal to their brain to get work done.

I'm more productive working from home. Analytical work is better done in the peace and quiet of my home (I live alone), but face time is invaluable in some situations. Also working from home is isolating. Many people end up working some or all of the time from cafes or coworking spaces close to their home. I go out most evenings to socialize and see people face to face.

A lot depends on how well the employer is setup for remote work. It really helps if there is a certain culture of remote work, and there are basic processes and tools in place to facilitate remote collaboration. I used to be at a startup where most people went to the office and I was remote. I did feel a little odd. I missed out on some meetings and water cooler convos. With time more remote engineers were hired and I felt a bit more "normal."

So even for software folks, whose work is well suited to remote work, it's not a clear slam dunk by any means. I imagine immediately post quarantine people will be more eager to go to the office. But on a larger time-scale I do think it will help accelerate the cultural shift to more remote work. Not sure how big that shift will be though and I don't know that it will make a significant dent in oil demand.

[GRG55]

Re: GRG 55 .........its a Bloodbath!

Could our response to Covid-19 cause a permanent reduction of demand for oil and gas? People who can telecommute are being asked to work from home. Tonight one of the anchors on the local news was broadcasting from her living room!

What percentage of the workforce can do their jobs from home with no loss of productivity? Is it big enough to make a dent in demand for oil and gas?

When this is all over, who would choose to go back to the daily rush hour grind, the traffic jams, all the wasted time, if they didn't have to? Maybe people who hate their spouse or kids, but for everyone one else, telecommuting could save them so much time and money! It could save businesses a lot of money, as well. If companies are willing to let it continue after the pandemic is over, wouldn't this cause a permanent reduction of demand for oil and gas?

You are suggesting a change in human behaviour that I believe is completely unachievable. For a number of reasons.

People don't congregate and collaborate at work because they are "ordered to". Most people will not want to spend their whole day, every day working alone in isolation, whether they are broadcasting news from their living room or writing software in their basement (btw, do you think your local broadcaster wants her family living room turned into a permanent studio for the benefit of her employer?).

A great many people have jobs they cannot do "from home". Those are employed in the still very large goods "production economy" or in the portion of the transaction and "services economy" that must be delivered in person (everybody from Tesla factory workers and the person that does your hair to the usher at the sports stadium).

For a great many the novelty of working from home is going to wear off rather quickly. My two staff are already complaining. My Controller wants to come to the office to get away from her 2-1/2 year old, so she can focus without distraction. My single-again Office Manager's four adult kids are all out of the house on their own, she hates being alone all day, and misses the informal information exchange (not to mention our now traditional wee dram of scotch we all have together every Friday afternoon in a ritual end to the work week).

Most of us are fundamentally social creatures. The reason video conferencing tech has never really taken off in the past 30 years is because of that. People travel long distances to meet face-to-face, to negotiate contracts, to conclude business deals with a handshake, to understand and see first-hand their customer's real problem that needs to be solved, to build trusted relationships, to share knowledge at professional or industry conferences, and more.

The remarkable rise of the low-cost airline industry in the past few decades is, in my mind, proof positive of the human need to congregate. And not just for family or leisure. Among other things I expect these low fuel prices to assist the airline industry to recover faster than it did after 9/11; and back then getting on a plane was perceived as a direct threat to your life, but it only took 2 years in a rapidly rising fuel price environment to bring traffic back to pre-event levels.

The ONLY thing that is going to stop global oil and gas consumption from exceeding its previous peak consumption is if the price ever gets back towards $100 per bbl. Increasingly bankrupt governments are going to have great difficulty continuing to subsidize alternate/green fuels. Worldwide consumers en masse are not going to pay a premium for a "range anxiety" producing EV. Low hydrocarbon prices are going to fuel emerging/developing economies at the fastest growth rates we have seen this century. They want the same things we have...better housing, better schools, better hospitals, the works. And they will have the growing young populations, the rising productivity and incomes to achieve it.