Monday, February 15, 2010

Electric Cars: Peak oil theory could become a stark reality TNR.v, CZX.v, WLC.v, LI.v, RM.v, LMR.v, SQM, FMC, HEV, AONE, F, NSANY, BYDDY, RNO, TM, TTM

With Oil price moving above 100 USD/barrel again question about Electric Cars and their adoption rate will move from: "Do we like it?" and into "Where can we get it?" very fast.

1. One year ago questions were - will it be Electric Car? Will it be powered by Lithium?Now it is almost out of the question - we will drive Electric cars after CV before anything else on a mass scale, they are ready, and it is lithium to power them. Question remains - how fast will be the adoption rate? It depends on battery cost, business models of market penetration (lease of the batteries) and government subsidies (they are in place in most markets)."

Full Report:

The Oil Crunch


Peak oil theory could become a stark reality

The ‘peak oil’ theory, coined in the 1950s, may soon be upon us, analysts increasingly believe
Tim Sharp

Published on 11 Feb 2010
“Within five years we think peak oil is going to affect every aspect of our daily lives,” warned Philip Dilley, chairman of engineer Arup, yesterday.
We are set for shortages and rising prices. And just to cheer you up, gas is probably going the same way too.
It all sounds familiar. The concept of “peak oil”, the stresses caused when oil production stops increasing, has been kicking around since the 1950s.
It hasn’t happened yet and, to many, the theory is becoming a little tiresome.
But the membership of the UK Industry Taskforce on Peak Oil and Energy Security, whose report Dilley was introducing, suggests these concerns are reaching the mainstream and business is getting anxious.
As a man known more for his fondness for pursuing commercial space flights and his airline brand than his love of the environment, Virgin Group founder Sir Richard Branson makes an unlikely green advocate.
As do others, including Ian Marchant, chief executive of Scottish Hydro Electric owner Scottish & Southern Energy and Brain Souter, founder and boss of transport firm Stagecoach.
Published yesterday, the taskforce’s second report (their first in autumn 2008 sank without trace because we were too busy worrying about our banks going bust) was notable for the starkness of some of its conclusions.
As the global economy expands, oil demand could rise from 80 million barrels a day to 120 million barrels a day by 2030. It could hit 180Mb/d by 2050.
Yet the scope for production increases is limited.
Arup director John Motes said: “There may be a huge amount of oil in the ground, we are not saying there isn’t. But there is a limit to the rate at which we can extract it.”
This is because much of the stuff is in the form of tar sands or inaccessible locations such as Antarctica where it is time consuming and expensive to get the stuff out of the ground.
Currently around 80Mb/d comes out of the ground, the report found.
But the taskforce is sceptical that this can get much above 92Mb/d.
Motes said we face the prospect of prices staying “structurally high” at levels well above today’s $71 a barrel level.
He added: “Maybe $150 (a barrel), maybe more. That is a pretty unpleasant thought.”
The UK faces a particularly bleak prognosis. After 30 years of self-sufficiency we face increasing reliance on imports, according to the report’s backers.
Branson said: “The onset of peak oil and therefore the end of the era of cheap oil will have a very, very wide impact.”
The report points to higher costs for consumers in transport costs, and energy bills and the costs of many everyday items. But it could also mean shortages and less predictable supplies as producer countries hoard black gold for their own use.
Those who are going to be hit worst are the poor, the report authors warned, particularly in rural areas where 1.5m people still rely on oil for heating.
This view is becoming increasingly accepted. A six-year oil price rally ending in 2008 supports the theory that world oil supply may be nearing its peak.
BP chief executive Tony Hayward recently predicted a demand peak of between 95 and 110Mb/d.
Christophe de Margerie, chief executive of Total, warned a couple of years ago it would be difficult to get 100m barrels a day out of the ground.
Marchant of SSE said yesterday gas could go the same way. This matters to him because SSE accounts for 15% of the UK’s gas demand.
“We think the demand for coal will go down as we move into a decarbonised economy and that will mean more demand for gas. We see peak oil being followed a few years later by gas being at a distressed price as well.”
Marchant believes that in the UK we are already 18 months behind schedule in dealing with the potential problem, although the drop in oil demand during the recession has bought us a couple of extra years.
He said: “My sense is that peak oil is a clear risk. If you do not think about that risk it will become a real problem.”
The report conveyed a sense of urgency, equating the “oil crunch” with the credit crunch.
“This time we do have the chance to prepare,” it said. But what should be done about it?
Funnily enough, government investment in power distribution and public transport featured highly.
The taskforce members had their personal ideas, too.
Stagecoach chief executive Brian Souter highlighted his own company’s trials of bio-fuel made from recycled chip fat. Widespread use of this would be economical once oil hits $70 a barrel, he told The Herald.
Souter also called for an overhaul of taxation.
He said: “I think we can do with a more radical approach to this by more of the political parties. We have a big fiscal problem facing us.
“I think the thing to do here is to take the poor out of tax and abolish the lower rates of tax and move to a carbon tax so users are actually paying.”
Marchant is adamant that “houses will have to be different” to be more fuel efficient.
He also called for changes to North Sea fiscal regime: “The tax regime for the North Sea does need a fundamental overhaul. It was designed in the ‘70s for an increasing production environment.”
He added: “Now is the time to have a proper look at what we want out of fiscal regime in the North Sea to get the incentives right.
“It can still be producing 60% of our oil by 2020 but it could be as low as 40% if we do not get the tax right.”
All of these are interesting ideas and act as a challenge to other business leaders to start thinking about the issues themselves.
But it still remains unclear quite how corporate Britain sees its role in protecting itself and the country as a whole from the looming oil shock.
Throughout all their presentations yesterday, nobody suggested investors in energy hungry firms have to accept lower returns."
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