The UK Just Banned Gasoline and Diesel Cars (20 years from now)

[samagon]

So the UK just passed a law that will ban all new car sales of gasoline and Diesel powered cars by 2040.

 

https://www.usnews.com/news/world/articles/2017-07-26/uk-to-ban-sale-of-new-diesel-and-petrol-cars-by-2040?int=news-rec

 

In the article it references that somer German cities like Munich and Stutgard are taking steps to reduce gasoline and Diesel powered cars in the city.

 

UK, so far as I know, is the first country to pass this kind of ban, when are other countries going to follow suit?

 

How is this going to affect the oil industry that makes up 40% of the economy in our town?

 

How will the oil industry react in the coming years to what will be more of these laws passing?

 

How long before the USA, Texas, or Houston decide to take similar steps either to ban the sale of, or reduce the use of gasoline or Diesel powered cars?

 

How is transportation in this city going to change?

 

Luckily 20 years is a long way away, but this has got to be writing on the wall for the oil industry, how do you think they will pivot so they can stay relevant?

[skwatra]

Seems like a political statement more than anything. The auto market was already dictating this change. People want affordable EVs. Good that they made it official and included a date.

 

Can't really speak to any of your questions, I'm probably the farthest away from the oil industry as possibly can be living in Houston (no one in my family or any of my close friends are tied to the industry).

 

As far as how transportation will change - i don't think getting rid of gas/diesel cars will change things, at least not here. I hope we keep making strides towards better mass transit, but even when gas powered cars are banned people will want their own vehicles and there will be options at all price points - i can't see that going away any time soon.

[gmac]

Isn't natural gas one of the prime sources of electricity production in Texas?

[intencity77]

Long overdue. This is the future. And you can add France to the list banning petrol/diesel vehicles by 2040 too. Volvo has also announced that it will only produce fully electric and hybrid vehicles from 2019 onwards. That decision is being hailed as "the beginning of the end for the internal combustion engine's dominance of motor transports after more than a century". I imagine more automakers will inevitably follow in time. Houston has time to further diversify their economy, otherwise it might end up with some major economical problems in the future. Sadly, antiquated ideals and policies set forth by our meddling, republican dominated state leaders will probably keep Houston from doing as such.

[Ross]

And, so far, no one has come up with a technology to replace the ability of hydrocarbon powered vehicles to travel hundreds of miles, refill the energy storage compartment in 5 minutes and travel hundreds more miles. My own feeling is that it will be nearly impossible to develop a means to charge a battery in just a few minutes. We also have no real means to generate enough electricity to charge millions of electric vehicles, other than(inset evil music here) nuclear.. We might be better served by developing a means to catalyze CO2 into other substances, either by decomposition or combining with something else.

[H-Town Man]

If you look at a graph of world petroleum consumption, it is linear upward and has been for at least two decades. Gasoline usage is only about half of this demand, iirc. Remember that almost everything we own and wear has petroleum in it. But even taking just gasoline usage, the number of miles driven in the world will double by 2040. The most optimistic predictions are for 100-200 million cars to be electric by then, only a fraction of the whole. The ultimate limiting factor is energy density - gasoline has more energy per its weight than any battery technology.

 

Lastly, if you look at the history of the oil industry, fears of its imminent demise have been there since the beginning. They swing back and forth, like a metronome, between "We're going to run out" and "Everyone's going to stop using it." I'm not saying it will last forever, I'm just saying that it never does what anyone predicts, and it hasn't stopped getting bigger (or even slowed down).

[Houston19514]

16 hours ago, H-Town Man said:

If you look at a graph of world petroleum consumption, it is linear upward and has been for at least two decades. Gasoline usage is only about half of this demand, iirc. Remember that almost everything we own and wear has petroleum in it. But even taking just gasoline usage, the number of miles driven in the world will double by 2040. The most optimistic predictions are for 100-200 million cars to be electric by then, only a fraction of the whole. The ultimate limiting factor is energy density - gasoline has more energy per its weight than any battery technology.

 

Lastly, if you look at the history of the oil industry, fears of its imminent demise have been there since the beginning. They swing back and forth, like a metronome, between "We're going to run out" and "Everyone's going to stop using it." I'm not saying it will last forever, I'm just saying that it never does what anyone predicts, and it hasn't stopped getting bigger (or even slowed down).

 

You are right that about 1/2 of oil production becomes gasoline.  Plus the oil & gas industry also produces natural gas.  I think gasoline comprises something closer to 1/4 of the total oil & gas industry production.

[H-Town Man]

1 hour ago, Houston19514 said:

 

You are right that about 1/2 of oil production becomes gasoline.  Plus the oil & gas industry also produces natural gas.  I think gasoline comprises something closer to 1/4 of the total oil & gas industry production.

 

I looked it up, gasoline is about 46% of U.S. petroleum demand, although production is a little different than demand, since we are still a net importer. Still, assuming that it's about half of production, I would imagine gas is a somewhat lower portion of revenue, since the remainder of petroleum goes to lubricating oils and other chemicals which are more expensive than gasoline. Then again, oil prices are all determined based on margins (our huge recession is the result of only a slight oversupply percentage-wise), so a loss of even 10% of demand would render oil almost worthless for many years.

 

Oil vs. natural gas is harder to compare since they are measured in different units, and it's liquid vs. gas. Your estimate of 1/4 vs. 1/2 suggests that oil and natural gas productions are relatively comparable. In terms of volume, natural gas is higher by several orders of magnitude. But in terms of revenue, at current prices, the U.S. produces about $450 million in oil a year and about $80 million in natural gas a year (assuming I did all the conversions correctly). Of course, the oil and gas industry makes a lot of its money on refining, transport, and overseas exploration and production, so these figures are a very rough guide.

[The Pragmatist]

1 hour ago, H-Town Man said:

 

I looked it up, gasoline is about 46% of U.S. petroleum demand, although production is a little different than demand, since we are still a net importer. Still, assuming that it's about half of production, I would imagine gas is a somewhat lower portion of revenue, since the remainder of petroleum goes to lubricating oils and other chemicals which are more expensive than gasoline. Then again, oil prices are all determined based on margins (our huge recession is the result of only a slight oversupply percentage-wise), so a loss of even 10% of demand would render oil almost worthless for many years.

 

Oil vs. natural gas is harder to compare since they are measured in different units, and it's liquid vs. gas. Your estimate of 1/4 vs. 1/2 suggests that oil and natural gas productions are relatively comparable. In terms of volume, natural gas is higher by several orders of magnitude. But in terms of revenue, at current prices, the U.S. produces about $450 million in oil a year and about $80 million in natural gas a year (assuming I did all the conversions correctly). Of course, the oil and gas industry makes a lot of its money on refining, transport, and overseas exploration and production, so these figures are a very rough guide.

 

At current price points, it's more like $150 billion of oil per year and $77 billion of natural gas from US production. Granted, that was me doing quick calculations from EIA figures, so I could be wrong.

[H-Town Man]

2 hours ago, The Pragmatist said:

 

At current price points, it's more like $150 billion of oil per year and $77 billion of natural gas from US production. Granted, that was me doing quick calculations from EIA figures, so I could be wrong.

 

Yeah I forgot to multiply by 365 on the oil. Not sure what happened with natural gas. Should have known those figures seemed too low.

 

[samagon]

On 7/26/2017 at 8:15 PM, Ross said:

And, so far, no one has come up with a technology to replace the ability of hydrocarbon powered vehicles to travel hundreds of miles, refill the energy storage compartment in 5 minutes and travel hundreds more miles. My own feeling is that it will be nearly impossible to develop a means to charge a battery in just a few minutes. We also have no real means to generate enough electricity to charge millions of electric vehicles, other than(inset evil music here) nuclear.. We might be better served by developing a means to catalyze CO2 into other substances, either by decomposition or combining with something else.

 

So far, these bans are bans on oil based fuels. China is now joining the 'ban fossil fuels' thing. China is the worlds largest car market, so this is pretty big news. The industry is going to respond.

 

https://www.engadget.com/2017/09/10/china-aims-to-ban-fossil-fuel-cars/

 

Whether the response is through electric vehicles, or some other current technology to store energy, or some as yet unknown energy storage, I don't think we can really predict 20 years into the future.

 

On 7/26/2017 at 8:19 PM, H-Town Man said:

If you look at a graph of world petroleum consumption, it is linear upward and has been for at least two decades. Gasoline usage is only about half of this demand, iirc. Remember that almost everything we own and wear has petroleum in it. But even taking just gasoline usage, the number of miles driven in the world will double by 2040. The most optimistic predictions are for 100-200 million cars to be electric by then, only a fraction of the whole. The ultimate limiting factor is energy density - gasoline has more energy per its weight than any battery technology.

 

Lastly, if you look at the history of the oil industry, fears of its imminent demise have been there since the beginning. They swing back and forth, like a metronome, between "We're going to run out" and "Everyone's going to stop using it." I'm not saying it will last forever, I'm just saying that it never does what anyone predicts, and it hasn't stopped getting bigger (or even slowed down).

 

Oil is used for many things other than just powering cars. Cars (through gasoline and Diesel) just happen to be the biggest driver of demand.

 

Once an oil company is not able to sell gasoline that means the other refined products from a bbl of oil have to float the cost of the bbl of oil. 

 

considering that currently a barrel of oil (42 gallons) when refined yields about 20 gallons of gas and 10 gallons of Diesel, that's 3/4 of the entire bbl that is going to an industry that is signaling it won't be needing that product any longer. 

 

Many of these other industries use oil based products because oil companies wanted to find something to do with the stuff that was left over from refining oil into gasoline and Diesel. Or at least they wanted to find something to do with the left over stuff that would cost too much to turn into gasoline/Diesel. So they made markets for this waste product.

 

When the cost of producing oil has to ride on these tertiary (or quaternary, or beyond) oil based products because no one is buying gasoline/Diesel? Those industries that use these products will respond by going with cheaper alternatives.

 

Anyway, we haven't reached peak oil yet, but it is coming, and it will revolve around these countries that are banning the use of fuels refined from oil.

[H-Town Man]

18 minutes ago, samagon said:

 

Oil is used for many things other than just powering cars. Cars (through gasoline and Diesel) just happen to be the biggest driver of demand.

 

Once an oil company is not able to sell gasoline that means the other refined products from a bbl of oil have to float the cost of the bbl of oil. 

 

considering that currently a barrel of oil (42 gallons) when refined yields about 20 gallons of gas and 10 gallons of Diesel, that's 3/4 of the entire bbl that is going to an industry that is signaling it won't be needing that product any longer. 

 

Many of these other industries use oil based products because oil companies wanted to find something to do with the stuff that was left over from refining oil into gasoline and Diesel. Or at least they wanted to find something to do with the left over stuff that would cost too much to turn into gasoline/Diesel. So they made markets for this waste product.

 

When the cost of producing oil has to ride on these tertiary (or quaternary, or beyond) oil based products because no one is buying gasoline/Diesel? Those industries that use these products will respond by going with cheaper alternatives.

 

Anyway, we haven't reached peak oil yet, but it is coming, and it will revolve around these countries that are banning the use of fuels refined from oil.

 

I love how you quoted a post in which I had said that gasoline usage was only about half of oil demand, and then explained to me that oil is used for many things besides gas, and that gas usage was about half of oil demand. But you have it backwards as to which came first, gas or the "waste product" of a barrel of oil. Originally, gas was the waste product. For the first 40 years or so of the oil industry, gas was simply burned off - nobody knew what to do with it. Nonetheless, the remaining "waste product" of oil produced the world's most powerful company (Standard Oil) and richest man (John D. Rockefeller). Then finally they found a use for gasoline.

 

Nowadays, the "waste" product of oil includes the world's plastics and other synthetic materials. I am quite confident these products will still be needed even if we stopped needing gasoline and diesel. I am also quite confident we won't stop needing gas and diesel, although demand may become a curved line rather than a straight line over the next 10-20 years.

[samagon]

42 minutes ago, H-Town Man said:

 

I love how you quoted a post in which I had said that gasoline usage was only about half of oil demand, and then explained to me that oil is used for many things besides gas, and that gas usage was about half of oil demand. But you have it backwards as to which came first, gas or the "waste product" of a barrel of oil. Originally, gas was the waste product. For the first 40 years or so of the oil industry, gas was simply burned off - nobody knew what to do with it. Nonetheless, the remaining "waste product" of oil produced the world's most powerful company (Standard Oil) and richest man (John D. Rockefeller). Then finally they found a use for gasoline.

 

Nowadays, the "waste" product of oil includes the world's plastics and other synthetic materials. I am quite confident these products will still be needed even if we stopped needing gasoline and diesel. I am also quite confident we won't stop needing gas and diesel, although demand may become a curved line rather than a straight line over the next 10-20 years.

 

Yeah, I am familiar with kerosene. 

 

I wasn't replying to your post discussing US gasoline demand, and wild assumptions about how much the refined products net an oil company. You were talking about US demand, not world demand. Does it not stand to reason that if countries demand less gasoline and Diesel that the unrefined product demand drops as well? And remember this is a global market.

 

Anyway, what post I was responding to doesn't change the fact that the worlds largest automobile market just signaled they are going to ban gasoline/Diesel.

 

If there are no other uses found for 75% of each barrel of oil pumped out of the ground we are watching peak demand coming like a slow freight train.

 

Stated another way, if the oil industry wants to remain relevant they will need to find a new use for what are soon to be unwanted products.

[Ross]

I haven't seen a viable alternative for aircraft yet, or for ocean going ships (nuclear is an option, but only in theory). I also think  the proposed deadlines are optimistic. Are they going to make all of us switch, and get rid of perfectly usable conventional vehicles?

[UtterlyUrban]

Err.... the article says this:

 

"The official hasn't given a rough estimate for when a ban would kick in......"

 

This is "rumor"...... this is politics..... this is "me too" feel good.    This is not policy.  

 

When the Chinese say that they HAVE BANNED the sale of new fossil fuel vehicles of all types by (a date within 10 years), without any other caveats or "outs", we will have something to talk about. 

 

 

[H-Town Man]

1 hour ago, samagon said:

 

Yeah, I am familiar with kerosene. 

 

I wasn't replying to your post discussing US gasoline demand, and wild assumptions about how much the refined products net an oil company. You were talking about US demand, not world demand. Does it not stand to reason that if countries demand less gasoline and Diesel that the unrefined product demand drops as well? And remember this is a global market.

 

Anyway, what post I was responding to doesn't change the fact that the worlds largest automobile market just signaled they are going to ban gasoline/Diesel.

 

If there are no other uses found for 75% of each barrel of oil pumped out of the ground we are watching peak demand coming like a slow freight train.

 

Stated another way, if the oil industry wants to remain relevant they will need to find a new use for what are soon to be unwanted products.

 

If you were not replying to my post, then sorry for the mistake, although you had quoted my post right above where you typed that, so you might see how I thought you were replying to it. Of course it stands to reason that if gas and diesel demand drop, crude demand will drop as well; I don't think I said anything that would suggest that wasn't understood. Wild assumptions... getting a little petty here, I acknowledged from the beginning that my numbers could be wrong due to the many conversions; as it turned out I missed multiplying by 365. It's not wild, it's just a mistake.

[samagon]

4 minutes ago, Ross said:

I haven't seen a viable alternative for aircraft yet, or for ocean going ships (nuclear is an option, but only in theory). I also think  the proposed deadlines are optimistic. Are they going to make all of us switch, and get rid of perfectly usable conventional vehicles?

 

This is true, aviation fuel, and heavy fuel for shipping is still needed. 

 

No one is going to pry your gasoline powered car out of your hands (warm and alive, or cold and dead), some countries have committed to not selling any more after a certain date.

 

1 minute ago, UtterlyUrban said:

Err.... the article says this:

 

"The official hasn't given a rough estimate for when a ban would kick in......"

 

This is "rumor"...... this is politics..... this is "me too" feel good.    This is not policy.  

 

When the Chinese say that they HAVE BANNED the sale of new fossil fuel vehicles of all types by (a date within 10 years), without any other caveats or "outs", we will have something to talk about. 

 

 

 

Indeed they have not provided a date, but:

 

Quote

China's vice minister of industry and IT, Xin Guobin, has revealed that the country's government is developing a timetable for a ban on sales of fossil fuel vehicles. The official hasn't given a rough estimate for when a ban would kick in...

 

Chinese official stating publicly on the record that they are going to do this is not rumor. If this were an article that cited "Sources in the government", that would be a little different.

 

Ultimately though, you're right, until they have revealed the policy and the date it's not official.

 

It is a clear message though, and one that's going to result in about 10% less demand for oil.

[samagon]

1 minute ago, H-Town Man said:

 

If you were not replying to my post, then sorry for the mistake, although you had quoted my post right above where you typed that, so you might see how I thought you were replying to it. Of course it stands to reason that if gas and diesel demand drop, crude demand will drop as well; I don't think I said anything that would suggest that wasn't understood. Wild assumptions... getting a little petty here, I acknowledged from the beginning that my numbers could be wrong due to the many conversions; as it turned out I missed multiplying by 365. It's not wild, it's just a mistake.

 

Are you sure that the UK is the world's largest automobile market? Are they even in the top 5? Also, do you think that a promise to ban something in 20 years is anything other than posturing and virtue-signaling?

 

 

Wild assumption in that the money that the oil companies make from each refined product.

 

Quote

Still, assuming that it's about half of production, I would imagine gas is a somewhat lower portion of revenue, since the remainder of petroleum goes to lubricating oils and other chemicals which are more expensive than gasoline.

 

perhaps I overstated, but anyway, this is what you said. I have no idea how much each refined product nets a refinery, but I am not so sure that your guess is accurate.

 

As far as the worlds largest automobile market, that's China. As I mentioned as well in my post you responded to, China has just announced that they plan on following suit by banning gasoline/Diesel car sales.

[H-Town Man]

Just now, samagon said:

 

Wild assumption in that the money that the oil companies make from each refined product.

 

 

Quoted from my "wild assumption" post:

 

"Of course, the oil and gas industry makes a lot of its money on refining, transport, and overseas exploration and production, so these figures are a very rough guide."

 

 

[H-Town Man]

11 minutes ago, samagon said:

 

Wild assumption in that the money that the oil companies make from each refined product.

 

 

perhaps I overstated, but anyway, this is what you said. I have no idea how much each refined product nets a refinery, but I am not so sure that your guess is accurate.

 

As far as the worlds largest automobile market, that's China. As I mentioned as well in my post you responded to, China has just announced that they plan on following suit by banning gasoline/Diesel car sales.

 

Another thing... I think you may have assumed that the "original post" we keep discussing (my second post on this page, about how much revenue comes from gasoline, etc.) was intended to be read as evidence that the oil industry was in good shape going forward. Nothing of the kind was intended. My only such argument came in the first post; the second one was merely to provide fodder for the discussion. My comment that a loss of even 10% of demand could render oil worthless for many years, if anything, gives ammunition to your argument.

 

[samagon]

5 minutes ago, H-Town Man said:

 

Quoted from my "wild assumption" post:

 

"Of course, the oil and gas industry makes a lot of its money on refining, transport, and overseas exploration and production, so these figures are a very rough guide."

 

 

 

right, and you didn't read beyond that to where I said I overstated? If I've somehow slighted you I'm sorry.

 

At the end of the day, prices really don't matter.

 

It's demand. China's announcement is significant. Should current usage rates continue at their current state, demand for refined gasoline will drop 8% specifically as a result of China.

[UtterlyUrban]

Samagon:

 

when any goverment "reveals that it's is developing a timetable", it is fair to read that as:

 

"hmmm, we need to make a political statement here.  We need to tell folks we might, at some point, do something, that might set a date decades in the future,  that will give us huge "outs" and caveats.  We don't want to lock ourselves in.  We just want to ride the current wave of PR.  So..... let's go tell everyone that we will 'develop a timetable'..... to even develop a time timetable will take years..... and then we will ride this PR wave out and see what happens before we have to do anything......"

 

I personally think that you are reading "government speak" (specifically in this case, Communist governament speak) as far too factual.