>the global oil market will get the shock of its life with a horrendous global oil crisis to match.
It won't.
There is a very large amount of oil production on hold or at low capacity in North America because the prices are currently too low and very much expected to go higher in the future.
Prices will rise up to 50% but that isn't much of a crisis or unprecedented.
Renewables will become more attractive and their growth will accelerate a little.
Oil prices are VERY VOLATILE in the last 50 years the number of times the price of oil has either halved or doubled with a year is not uncommon. It has occurred at least a dozen times.
And more importantly, oil prices are less important to the economy than most people believe.
This just isn't true at all. Developed economies rely more on oil than less developed ones. Plus, more of that is driven by prices at source because in undeveloped countries delivery effort is a big price component. Here is some context on the volatility of oil: https://www.thebalance.com/oil-price-history-3306200
10y ago we were at almost twice the price and developing countries weren't "on strike full-retard" or seeing oil driven defaults.
The closest to a country really being screwed recently by oil prices have been exporters, especially Russia which depends on higher prices to balance its budgets and had been harmed byow prices.
That's not to say that oil prices "aren't important". It's just that every industry/economy/etc had been forced to learn to weather price volatility. That's. Why there is such a developed futures etc market.
Depends on how you define "on strike full retard", at least where I live (Indonesia), it is spot on.
Some context: Indonesian govt. subsidizes fuel to quite a large degree, up to ~50% of relative to petrol prices. Over the years, they've been trying to draw down, but it's a touchy subject.
Last year, ~10% of state budget was spent on fuel subsidies (to give us a sense of scale).
Thanks for cluing me into the interesting history of Indonesian subsidies. Here's a good analysis for English readers [1]. It looks like fuel subsidies were very high 5y ago, when oil was at 2x today, and have come off significantly since.
I'd argue that this is exactly the sort of price stabilization mechanism that makes oil volatility less scary it sounds on its face. The government is centralizing (and, more controversially, socializing) the financial cost of creating internal price stability. This is actually pretty common, and I'm not sure 10% of budget (at peak) is as outsized as it sounds. In the USA, this takes the form of buying and releasing oil from the strategic reserve, but also in a mountain of foreign policy (read: military) spending on maintaining stable supply lines for energy trading.
Fuel subsidies in a lot of developing countries are politically weird. They mostly benefit wealthier people, but are most ardently supported by poorer people. It's difficult to disentangle.
People like free stuff, and after some time, it becomes expected.
Moreover, think of it in the opposite direction. Imagine a getting hit with a 10% tax increase even if a richer guy gets 15%. Him being taxed more doesn't necessarily make that 10 feel much better.
Oil prices were double what they are today in 2014, and triple in the depths of the 2008 recession (before falling to roughly current levels in 2009). They were roughly half current levels in the 2000 recession. They were roughly equal during the oil crisis in the 1970s.
Sudden shocks to oil prices seem to be able to cause recessions, like the 250% increase in 1973 or the 200% increase from 2007-2008, capping off a 500% (!) increase from 2002-2008. But these are a lot bigger than the 50% increase postulated here. We've withstood 50% increases (1994, 2004, 2016) or even 150% increases (dot-com boom) with no ill effects.
Oil prices were 50% cheaper not too long ago, and the food wasn't significantly cheaper, so I can't see how more expensive oil will make the food prices "skyrocket".
Yes, and in a prisoners' dilemma with thousands of players, someone is surely going to defect and sell their stuff cheaper to undercut the competition. I don't think I've ever heard about large scale collusion to fix prices in food industry, and I won't hold my breath for it this time.
I remember a high school policy debate in early 2009 when my opponent prepared an argument that horrible things would happen if the price of oil dropped.
Fortunately for me, they hadn’t read the newspaper lately.
It was a lot of fun to quote the collapsed oil price from a newspaper I found lying around and then relax the rest of the debate.
You don't think that steeply increasing gasoline prices, and the resulting squeezing of discretionary (and not so) income could have popped the US housing bubble ?
I think when people are thinking of "oil prices", as consumers they're converting that to "petrol prices" (and fuel oil if they use that) and thinking "if petrol/heating prices rise >50% that's going to be very hard".
Petrol prices only falling by four-twelths when the crude price fell by nine-twelths suggests that petrol costs a lot on top of the crude price and that a 50% crude increase might lead to, say a >100% petrol price increase.
There are considerable refining costs and transport costs from the refinery to your tank. Especially so because in the UK I don't believe you have considerable refining industry so I assume much of it is imported and then FOREX comes into play. Fuel taxes, at least in the US, are constant per volume and not relative to price and in California make up currently about 15% of the cost.
On top of all of those factors I would only guess that at high prices profit margins fell by ratio which was recovered (or just increased) when prices fell.
> Petrol prices only falling by four-twelths when the crude price fell by nine-twelths suggests that petrol costs a lot on top of the crude price and that a 50% crude increase might lead to, say a >100% petrol price increase
Why? If petrol price is fairly inelastic to crude price (for reasons siblings note) that means it would increase a little, not a lot.
Food prices in general tend to follow hydrocarbon prices. Not just because of the tractors and trucks, but also because of fertilizer. The Haber process is essentially a method of turning natural gas into corn and wheat (and then beef, pork, etc.)
Something like 5% of world natural gas consumption is to drive the Haber process to create fertilizer that then drives everything else in modern agriculture. Now, natural gas and oil prices are not as correlated now as they used to be (due to fracking) but there seems to be some residual connection between the two, so that could be something to look out for.
In the USA, oil represents about 17% of manufacturing pricing. It obviously hits some industries much harder than others. Agriculture is particularly vulnerable. Large-scale farmers have tight margins and fertilizer is essential to factory farming.
People being unable to get to work, trucks being unable to deliver food to stores because gas is unavailable. (I don't foresee any scenario where we get to that point, but if it happened it would be a crisis.)
A 50% price increase would be bad for people who have to drive and are in a financially precarious situation, but it's not any more a catastrophe than all the other various things that affect people in financially precarious situations, which upper-middle-class people can shrug off as a mild annoyance.
Thanks for the reference, albeit paywalled - was the disparition of gas lines an immediate consequence of the order, or did it just potentially prevent future gas lines ?
I'm surprised it isn't talked about more. During the gas allocation times, there'd be a glut of gas in Florida and long lines in California because the DoE would allocate gas based on the previous year's usage patterns. Things change constantly, and the DoE was unable to adapt.
I had a friend who bought a gas station. It took him months to get a gas allocation from the DoE because the gas station across the street challenged his allocation, for obvious reasons.
When the market decides where to put the gas, the tanker trucks take gas from the glutted areas and move it to the shortage areas as a natural action. Any reasonable business moves product to where it is selling.
Not having enough at any price. The "peak oil" nightmare scenarios are where demand truly outstrips supply. Price eventually becomes irrelevant as physical access to the resource matters more than cash.
I personally don't think that will ever happen. The increased adoption of renewables means oil demand will not outstrip supply.
"Running out of oil" is an economic criterion, where demand outstrips achievable supply (where the cost of extracting the oil is not so high that it becomes an economic net negative). There's no material difference in outcomes between this and your "doomsday" version, but the former is actually something that's going to happen, while the latter probably never will.
Oil consumption has been increasing primarily because the price has been declining. If the price was higher then more people would use alternatives that are currently more expensive but wouldn't be against higher oil prices.
If the Saudis are under-reporting their reserves, that's why. They don't want oil prices to be higher because it makes alternatives more competitive. It doesn't help them to sell oil for 50% more for a few years while that spurs everyone to buy electric cars and charge them with solar panels, only to have that demand reduction cause oil prices to decline below their current level and stay there forever. Or worse (for them), for consumption to decline to the level that consumers no longer strongly oppose a carbon tax, which would naturally cause consumption to fall off a cliff (as intended) as even more people switch to alternatives.
On top of that, the alternatives need volume to build economies of scale which make them more competitive. This is already happening but would happen faster with higher oil prices, and as it does the result is a permanent reduction in alternative energy costs, making oil less competitive even at lower prices.
Saudi has a lot of sun and a lot of room. You’d think they’d be investing heavily in solar, and large (TW) interconnects to Europe (via Iraq/turkey or via Egypt/med), or in large scale electrolysis to hydrogen
They are (kind of), or at least talking loudly about it. They just don't seem to be very good at pulling off these sort of ambitious large scale projects.
Cars are only a part of oil consumption. Also, it's going to take decades to switch rich countries to electric cars, if that is even economically possible...
Moreover, you don't have to replace all cars to significantly reduce oil demand when each replacement with an electric vehicle reduces that driver's oil consumption by 100%, particularly when the vehicles most likely to be replaced as a result of higher oil prices would be the ones that drive the most miles. On top of that, the non-electric vehicles sold during periods of high gas prices would tend to be high fuel economy vehicles as well, and the vehicles in the existing installed base most likely to be junked would be the most inefficient ones.
The US is somewhat lagging "the world" right now in personal electric vehicle adoption. There are more brands/models/sales in both the European and Asian markets than the US is currently seeing.
The Chinese market in particular is fascinating from an EV perspective. Particularly because it seems to indicate that non-personal vehicles (especially buses, delivery trucks, and semi-trucks) are either going to be not far behind in electrification or even possibly slightly ahead.
It is starting to look like in the US it will be the case that commercial vehicles may electrify faster than the personal vehicle market (at least partly because manufacturers aren't really selling EVs for personal auto sales in a tautological fallacy that they think they won't sell in the US). Amazon's big recent deal with Rivian, for instance, should put a lot of commercial EVs on the streets. UPS' similar older, quieter deals with multiple companies pushing them to hybrid trucks only already and an entire EV fleet supposedly in the next several years. Proterra seems to be making great headwind in the US bus market, as another example.
Faster if oil prices go up, certainly. The problem with estimating time is there are too many factors. We might only be "one big disruption" away from a surprisingly quick transition. We might just continue a gentle slope transition.
I think there are some interesting possible big disruptions on the horizon:
- Oil prices go up (as this article is about)
- EVs become the cheapest powertrain option for any new vehicle. VW's ID.3 is already cheaper than all comparable Golf models, and most of the other German manufacturers expect to hit that switchover (due to efficiencies of scale) for almost all their models no later than 2023. (Chinese manufacturers seem to have mostly hit the switchover point already. Most other Asian manufacturers aren't far behind. Traditional US manufacturers GM and Ford are idiots and lagging everyone else again.)
- Somewhat similar to above, a small disruption in the complex web of internal combustion engine supply chains could potentially domino to greatly increase new ICE vehicle costs, and even potentially have similarly drastic consequences to ICE vehicle repair/maintenance costs. Internal combustion engines (especially compared to EV motors) have a lot of little, very specialized parts. Even just one supplier pivoting could have fascinating consequences. (With perhaps the only counter-disruption being something like 3D printing hitting certain machining specifications that seem currently unlikely.)
The middle one is definitely happening. The article here suggests the first one is maybe closer than people expect. The third one is one I'm amusedly watching, and I think is going to be a quick accident after the middle one happens. If German manufacturers move to certain sales benchmarks, that definitely affect global suppliers that are Germany-based such as Bosch, as just one example of many, and GM/Ford certainly have plenty of Bosch pieces in their supply chains, whether they admit it or not.
> What about the issues with lithium and coltan supply for batteries ?
Lithium is in large supply (Atomic Number 3, right, third place on the Periodic Table), and is easily recyclable from current batteries.
Cobalt is a miniscule portion of current battery compositions. Most battery companies have been working to minimize or remove it. It should be recyclable, but it's never been economically feasible to recycle it from current battery compositions because a) it is such a minority component of current batteries, and b) Cobalt is cheap. (Cobalt is a "waste product" or by-product of Nickel mining today. The threat to Cobalt supply is that most Nickel mines today are in politically questionable regimes such as Columbia and the Democratic Republic of the Congo. But Nickel mining is likely something that continues to happen regardless of politics.)
> What about the ~+33% increase required in electric power generation to replace oil in transportation ?
If every car on the road today switched to EV tomorrow, but made sure to charge only during the "bathtub" of off-peak (evening) hours, there's absolutely no increase in power generation needed. Our culture's day-time peak generation capability, which has to account for most of our industrial use, is more than sufficient so long as consumers are smart about when they charge.
(The difference between Peak demand during the day and off-peak evening hours really is huge. "Filling in the bathtub" that the off-peak hours create in the demand chart is considered something of a holy grail for decades in utility grid planning because it would mean more base load generation that doesn't have to shut down every night and can run more continuously/smoothly every day.)
Smart Grid solutions exist and are being planned where cars can even help solve demand problems by acting as sitting batteries (as owners allow them to) that utilities can "loan" power from a car during peak demands, and pay back with "interest" during off-peak (and potentially doing so at an incredibly granular level).
All of which is to say that there are already market solutions to the increased electricity consumption of EVs.
Peak rates might go up, perhaps, but the natural tendency of most EV owners is already to charge during off-peak (at home on the evenings), even without the extra incentives of big cost differentials between peak and off-peak utility rates. Most EVs today already have okay off-peak hours selection tools built-in, even without the detailed electricity price-sensitivity options that Smart Grids might eventually bring to the market. (But Smart Grids are certainly on utility road maps because there's a lot they could do with that extra demand sensitivity.)
I've yet to hear a worst case for EV electricity demand that would need 33% more capacity at Peak demand. That's an interesting and presumably unlikely scenario.
Yes, there's a lot of potential with basically using car batteries to smooth out the intermittency issues... I guess that this might be relatively easy (still, despairing about the slow pace of changes...)
Being at the 3rd place in the atomic table isn't a guarantee of availability - after all hydrogen is first, is 75% of the mass of the universe, and yet isn't directly available to us ! (at a low cost)
And recycling batteries won't help much when the goal is to massively increase production...
Battery production doesn't seem to be the bottleneck in EV production a lot of people seem to think it is. The major battery companies (LG Chem, Panasonic, et al) have all been ramping up to meet the demands they've been contractually asked to meet, and we generally haven't seen shortages or massive price spikes in either direction.
The only EV producer that's outright complained about battery availability is Tesla, and it's very easy to wonder how much of that was marketing spin to cover other production issues (and the accusation of the traditional car manufacturers that car production is hard and has huge startup hurdles), and maybe even PR/marketing spin to their own investors to explain insourcing battery production (building the "gigafactory") rather than partnering with an existing battery manufacturer.
Tesla probably has scaled faster than most other car companies, but yet it has also scaled much less comparably (to say Renault or VW just signing delivery or plant contracts in partnership with existing battery manufacturers rather than building their own factories from 100% "scratch").
I'd love to see a better analysis of the battery market right now. I'm betting the catch-22 that car manufacturers don't feel a lot of consumer demand for EVs has more on bottlenecking EV production than batteries in the current term.
It's fair to say that oil consumption has been increasing both because the price has been declining and because of increasing industrialization. But you can see pretty clearly on that graph that whenever the price spikes, consumption then drops. Supply and demand is in effect.
And for most of the period on that graph, we didn't have the alternatives we do today. When oil prices spiked in 1979, people bought smaller cars that got better mileage, but they still ran on petroleum and used gas stations, and then people started buying petrol SUVs when gas prices came back down. If that happens in 2020 then people buy electric cars rather than econoboxes, and then we get more charging infrastructure and more battery research and economies of scale, and there would be no obvious advantage in ever switching back even if oil prices subsequently declined to their current level.
I remember $4/gal gas. Seeing my pump price go from $2.30 to $3.50 would be unpleasant but it would still feel like the end of a lovely grace period, not the beginning of a crisis.
Shit, it's around $3.80 here in Seattle if you naively go to shell which seems to be highly priced here everywhere. Granted, I always go to safeway and arco where I can get it for 3.10 but for some reason I see tons of people at the expensive ones when you can easily find stations on google maps with their pricing listed for much cheaper.
I believe around 10 years ago, the price per gallon of gas was around $4. It's now around $2.50, so we have dealt with prices that high in the recent past.
Hurricane Ike put most of the oil processing plants in the Houston area offline, which led to a US-wide spike in gas prices. I've been there when it happened and it wasn't pretty.
I'm not implying a correlation--there is one, along with a very longstanding correlation between oil consumption and GDP. What I'm implying is the much more contentious claim that this relationship has a strong causal component, too.
Good old-fashioned fraud. Oil prices had nothing to do with it.
Source: acquaintance who spent three years in court testifying about the rampant fraud in the mortgage industry. He worked for an investment bank which is no longer with us.
I'm well aware of the structural fraud.
My point is that the reason that the bubble popped at that point (and not some years later) were the skyrocketing oil prices, themselves a consequence of (conventional) peak oil.
But I guess that it's a bit academical, as that bubble would have popped soon enough anyway...
"There is a very large amount of oil production on hold or at low capacity in North America because the prices are currently too low and very much expected to go higher in the future."
You realize that this is the clusterfuck? no? We are looking to a Jojo effect. Oil prices too high? Recession. Oil prices too low? Oil producers can't afford to invest and produce (what is already happening now).
This is actually the reason why we will never run out of oil. No kidding. I assume most of the oil will stay there, where it is. In the ground!
Why? Why would it not simply stabilize at say 20% higher than now?
> This is actually the reason why we will never run out of oil.
That is either word games or nonsense. People will keep extracting oil and there is only finitely much available at reasonable prices. Note that "run out" here does not mean there is no oil left. Just like a country "running out of food" does not mean that there is nothing edible anywhere in the whole world.
"Why? Why would it not simply stabilize at say 20% higher than now?"
How about 100 or 150%? Above 100 USD you may be able to afford gas. Many people can't.
"That is either word games or nonsense. People will keep extracting oil and there is only finitely much available at reasonable prices."
There are two points you ignore.
Falling ROEI (return of energy invested) on energy invested. Good oil has a ROEI over 20 (over 100 AFAIK for the first wells long time ago). This is sinking. It is 1:2 ROEI for shale gas. At 1:1 if does not make sense to try extracting.
The same with money. Energy and money are interlinked.
www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html
Have a look of the money invested for further exploitation by big oil companies. Constantly sinking. The problem is you need high oil prices to justify investments. At the same time running an economy above 100 USD for oil is tricky. People can simply not afford it. Maybe you can, again, many people cant.
"Let’s do a thought experiment. Say the world’s proven oil reserves are 400 million barrels. And say world oil consumption is 20 million barrels a year, growing at 5 percent annually.
Question: when will earth’s oil reserves be 100 percent depleted?
OK, timeout. Before you grab a pencil and break out the scratch paper, I should warn you — the answer isn’t 14.2 years. Or 20.4 years. Or any other number of years.
>most of the oil will stay there, where it is. In the ground!
Of course it will, because we have mroe than enough oil to burn to put out enough CO2 to take us to +20 deg warming or more. So unless we get cheap CCS (carbon capture and storage) it's a good thing that most of the oil stays in the ground.
I don't even think they'll even rise 50% in the long term. Gasoline ICEs are trivially convertible to natural gas, of which the US has a darn near inexhaustible supply. Natural gas is cheaper even today, but not cheaper enough for drivers to bother. If gasoline is $6 and natural gas is $2 per equivalent gallon, people with longer commutes will reconsider. Current price in the US is between $0.79 and $1.50 per equivalent gallon btw.
CNG for consumer vehicles is really inconvenient. CNG tanks take a lot more volume than gasoline tanks, tanks are supposed to be inspected every 3 years, and they expire 20-30 years after manufacture (and the tanks may have been manufactured much earlier than your vehicle). Some fuel stations (notably, PG&E's) require proof of recent inspection. And, replacing the tanks when they expire isn't economically feasible, leaving you with a lump of coal.
Non-obviously, only about half of the price of filling up is for the natural gas, the other half is electricity cost to compress it to pressures way beyond the pipeline pressure. This makes home based filling impractical, and CNG filling stations are fairly sparse.
Source: In 2017, I _really_ wanted to get a CNG Crown Vic/Town Car for HOV access, part of which was planning for a purchase in Los Angeles and driving to the Bay Area, refueling on the way; with the limited range, and without access to PG&E stations, I'd need to go up the coast, because I wouldn't make it on the 5.
It's all matter of regulatory climate. In Poland, there are millions of cars driving on LPG every day. Most gas stations offer LPG in addition to gas and diesel fuel. Stations don't require any proof of inspection, and moreover most of them are self-serve. There are plenty of shops that will retrofit any car (even diesels!) for LPG for about $500-1000. This is just a mundane, everyday thing.
I owned an LPG-fueled car and it was really no different than gas-fueled one, other than more frequent need for refuel (I had a small tank installed where the spare tire used to be, and it only had around 100 miles of range).
Natural gas contains propane as one of it components, so it can be filtered out. You can also refine shorter chains of hydrocarbons in natural gas to make propane.
What you're describing are combined side effects of the lack of demand, and the current regulatory climate, which is particularly ridiculous in your state.
In the 90's (!) much of the taxi fleet (and a good number of trucks) in Moscow, Russia was powered by CNG. Everything worked fine, in spite of a much lower level of technological advancement. If gasoline were to permanently go to $6+/gal, and the industry was deregulated a little, you'd see CNG retrofits that cost sub $1K and last for the lifetime of the car in basically no time at all. All the tech has been in place for decades, it's just a matter of demand now.
> tanks are supposed to be inspected every 3 years, and they expire 20-30 years after manufacture (and the tanks may have been manufactured much earlier than your vehicle). Some fuel stations (notably, PG&E's) require proof of recent inspection. And, replacing the tanks when they expire isn't economically feasible, leaving you with a lump of coal.
wouldn't all of these problems be addressed more adequately by a larger potential customer base & supporting infrastructure? (e.g. annual car inspection==tank inspection, cost decreasing due to bigger market, etc)
The tank inspection is not a quick visual inspection. It’s take it out, empty it, fill and pressurize with water in a protective enclosure, measure the expansion strain, drain, dry, stamp the inspection date, reinstall, purge, and refill.
broader point still stands I think - if this was required of everyone every year, a secondary market like propane tanks for backyard grills, etc would probably emerge or it would be part of mfg warranties.
side note: no, I don't think market solves everything.
The efficiencies of scale switchover point is probably a lot closer to hand than you think. VW's ID.3 is already cheaper than all comparable gas models of the (outgoing) similar Golf, and just about all of the German auto manufacturers have been not-so-subtly saying that they expect that all of their EVs will be cheaper than their comparable models with other powertrains in the next couple years.
China has sub-$15k equivalent EVs today. Cheap EVs are certainly physically possible even with today's scales, and partly it's just the catch-22 perception hump of "EVs are only for early adopters and luxury cars" (for both consumers and manufacturers) keeping EVs from hitting some scale benchmarks to push them cheaper.
The used market still isn't showing a lot of EVs, but that seems to be that statistically most EV owners keep their cars for longer. That's an interesting statistic, that maybe points to reliability on one side, and a possibly very different replacement rate on the other side. Which is to say that the average EV first owner is currently keeping their vehicle for 7-10 years rather than the 4-5 year replacement rate that has been of typical of ICE vehicle sales. (If EV owners were only keeping their cars for 4-5 years, as you suggest of some hypothetical "HN bubble" that would be a lot more of them on the used car market, and in turn fewer complaints of the high cost of EVs. The long first life of an EV is also keeping the costs up and affecting depreciation rates.)
Could be. I'll believe it when I see a $15K well equipped EV with 150mi+ range, no subsidies, no "fuel savings", no bullshit. We aren't there yet, to put it mildly, and given that battery production capacity can't keep up with demand, it's unlikely that we'll get there in the near future. But CNG is doable today. Pipelines are already there, fuel production capacity is basically inexhaustible for all intents and purposes, and existing manufacturers could easily adapt existing models of cars to the new fuel while they keep using the same facilities, equipment, workers, and dealer network as before.
I'd love to get an EV one day, when the pricing is less nutty than it is today. But it has to be economically viable for me. Right now it's not.
That's actually far easier to do (if there's demand) than $15K EVs. For an auto manufacturer, very little cost: replace the gas tank with a CNG cylinder (cylinder can be manufactured cheaply if economies of scale are in place), use the piping able to withstand the pressure, use slightly different injectors. Done.
Batteries, perhaps, but it does not actually take very long to start up a cell production line (and other aspects, such as raw materials). If given the certainty of policy, accommodating regulators, and federal financing support, the lag between demand outstripping supply and new supply coming online may only be 2 or 3 years.
And for electricity, the utilities actually need the extra demand because of energy efficiency reducing lighting costs and distributed solar and subsidized wind providing occasional gluts. Since EVs can fairly easily be set to charge (most the time) on a schedule when electricity is most abundant, this is good for everyone.
Worldwide power consumption is 109 GWh/year, only 24 of which are for electricity. Oil is 31% of that (34 GWh/y), but only 4% for electricity (~1 GWh/y).
EDIT : Whoops, my bad, somehow forgot that we were talking about transportation, which is "only" a quarter of power use...
So you need to go from 24 to 24+(34-1)/4 = ~32 Gwh/year, a 33% increase, and you expect to be able to do that in 2-3 years ?!
(Napkin calculations, not taking into account various (in)efficiencies and intermittency issues, but the order of magnitude should be roughly this one...)
? Your energy units are weird. 109 Gigawatt-hours per year is just 12.4 Megawatts. Worldwide average primary energy consumption is 18 Terawatts, or 157,000,000 Gigawatt-hours/year (GWh/year). Electricity (which is higher usable energy than "primary energy) is about 3 Terawatts average globally, a lot more than 4%.
US average electricity is ~475 Gigawatts. But there's a huge difference between average electricity and nameplate capacity. Natural gas peaker plants have about a 200GW nameplate capacity in the US but only produce about 25GW average. If we ran just the peaker plants all-out, we'd generate an additional 175Gigawatts.
US gasoline consumption is about 400 million gallons per day. I drive a Volt, and typically I get about the same range in 10 kWh that I would in a single gallon (Model 3s do even better, however). So roughly speaking, We'd need about 4 TWh per day, or about 167 Gigawatts average extra. Technically, averaged over the year, then, our peaker plants would have enough extra capacity to produce enough electricity. But natural gas combined cycle plants would also generate about another 100GW if ran all-out. (None of this is terribly realistic as there will be local transmission constraints and weather-related demand spikes which the peaker plants are needed for, but it is instructive.)
However, it'd take a good 10-15 years to mostly turnover the whole gas car market in the US even with a revived "cash for clunkers" program, so the capacity expansion would have plenty of time to sort these things out. We can expand solar and wind over this time even while phasing out gas.
The main thing, however, is the battery production.
Blame Wikipedia('s sources) for the weird energy units.
(I didn't want to bother with conversion when most of the sources seem to be in Wh/year anyway...)
It's 4% of electricity coming from oil, sorry for the confusion.
(Hmm, I might have made another mistake here - eh, it's smaller than the uncertainty anyway...)
167/475 = 35%
Nice to see that the math seems to check out with your data too. The issue of intermittence would warrant whole books of studies, hard to do it properly in comments here...
While an individual vehicle is trivially convertible to natural gas - modifying enough of a countries fleet to make a measurable difference fast enough is a completely different matter. It is unlikely that more than a trivial fraction of a total nations vehicles could be converted in a single year unless a significant amount of contingency (training, facilities and parts) is established.
I'm not sure what data you are looking at but most NA production is online as the current prices are profitable so most models show little increase in production coming from NA.
And this large amount of oil production the USA is sitting on is light sweet crude, needed for gasoline? Same grade as Abqaid? And we have the infrastructure required to transport it?
(Hint: we don't. It's estimated it would take us minimum of 2 years to complete the required infrastructure build out)
so, finding out that the currently-sufficient production quantity doesn't have as high of a ceiling as previously expected would result in a crisis so big that there would be problems with oil supply for the 2 years needed to complete the required infrastructure build out?
I don't see how this negates the parent w/r/t the parents-parent.
Like others have said, this oil would probably be run to refineries by train. This is inefficient, but until new pipelines are built, it's the best way to get oil from the field to the refinery.
I wouldn't bet on it. Just take a look at all the opposition aimed at pipelines. Maybe in the US pipelines have more of a chance but as it stands Canada is unable to complete a pipeline project anymore.
it is light sweet crude. Likely will rely more and more on trains. Which would be a better buy than picking a oil company, since no one is divesting from train companies.
It won't.
There is a very large amount of oil production on hold or at low capacity in North America because the prices are currently too low and very much expected to go higher in the future.
Prices will rise up to 50% but that isn't much of a crisis or unprecedented.
Renewables will become more attractive and their growth will accelerate a little.