Bottom Line:
Industry Survival - Auto vs Oil
BMW has announced they will release a PHEV of every core model. The electric car community seems to be largely unimpressed with these PHEV offerings, but each one sold reduces a driver’s gas usage by about 50% and further advances the technology.
However long it ultimately takes the electric car adoption cycle to play out, it seems inevitable that the oil industry will need to stop using “Lower for Longer” and get used to “Lower Forever”.
Lower Forever: Electric Cars and the Inevitable Reality of the Oil Market
Proponents of the Electric Car
are already convinced that the advent of cars with plugs will ultimately spell doom for the Big Oil companies and countries that rely on oil exports. Meanwhile the oil industry, led by OPEC, is expecting steady growth through at least 2040. But what will it take for the rest of the market to “see the light” and accept the fact that demand for oil will soon peak and slowly erode?
are already convinced that the advent of cars with plugs will ultimately spell doom for the Big Oil companies and countries that rely on oil exports. Meanwhile the oil industry, led by OPEC, is expecting steady growth through at least 2040. But what will it take for the rest of the market to “see the light” and accept the fact that demand for oil will soon peak and slowly erode?
In this report I will examine the fundamentals of oil demand destruction from a markets perspective. Using a combination of conservative estimates, educated guesses, and market insights I will quantify the amount of PEV sales needed to cause enough oil demand destruction necessary to change the long term outlook of the oil market. Furthermore, assuming an “S” shaped growth curve I will provide insights as to how long it might take for this shift in market psychology to occur.
n late 2014 through 2015 a worldwide oversupply of crude oil existed mostly in the order of 1 to 2 million barrels per day according to the EIA. WTI Crude Oil sold off from well over $100 in mid-2014 to under $27 a barrel in February of 2016. As a result of the prolonged oversupply and pricing pressure, oil companies drastically slashed capital expenditures, reduced workforces and reluctantly accepted the “lower for longer”mantra.
oversupply of crude oil existed mostly in the order of 1 to 2 million barrels per day according to the EIA. WTI Crude Oil sold off from well over $100 in mid-2014 to under $27 a barrel in February of 2016. As a result of the prolonged oversupply and pricing pressure, oil companies drastically slashed capital expenditures, reduced workforces and reluctantly accepted the “lower for longer”mantra.
But what would it take for the market to accept what electric car advocates already believe – that prices and demand for oil will remain Lower Forever? To begin with, the market needs to observe enough oil demand destruction to conclude that electric cars are having a significant impact on market fundamentals. If this can be observed in the context of an “S” shaped growth curve, market participants will quickly realize that oil will soon reach Peak Demand and then begin falling. A huge psychological threshold will be crossed when electric cars beginning displacing about 50% of annual oil demand growth. At that point it will be pretty obvious that oil consumption will inevitably begin a steady decline.
and demand for oil will remain Lower Forever? To begin with, the market needs to observe enough oil demand destruction to conclude that electric cars are having a significant impact on market fundamentals. If this can be observed in the context of an “S” shaped growth curve, market participants will quickly realize that oil will soon reach Peak Demand and then begin falling. A huge psychological threshold will be crossed when electric cars beginning displacing about 50% of annual oil demand growth. At that point it will be pretty obvious that oil consumption will inevitably begin a steady decline.
In the short film, Life After Water, an interactive documentary by MediaStorm and Verse, the filmmakers utilize stunning, yet worrisome arial drone footage of Jesus’s farm to show the drought’s effect on Terra Bella’s farming community. The film grapples with the inevitable question that will arise if climate change doesn’t stop: what will we do when the water ends?
The Mu Sigma researchers define this in their analysis as “the power of extreme experimentation”, claiming that science can demonstrate that failure drives forward innovation. This approach is echoed by engineers working in the pharmaceuticals, material sciences and automotive industries. “Those at the forefront of technology have to fly into mountains,” explained Ray Gibbs, CEO of Haydale, a material-science company based in the UK, US and South Korea that works with graphene to improve the properties of everyday materials such as inks and coatings. Gibbs believes that in order to develop any successful product you must try lots of different ideas to get to that end result, learning from the failures.
The market for industrial robot installations has been on a skyward trend since 2009, and it is not expected to slow down any time soon. According to the World Robotics 2015 report, the market for industrial robots was approximated at $32 billion in 2014, and in the coming years it is expected to continue to grow at a compound annual growth rate (CAGR) of at least 15%.
U.S. Concern About Global Warming at Eight-Year High
PRINCETON, N.J. -- Americans
are taking global warming more seriously than at any time in the past eight years, according to several measures in Gallup's annual environment poll. Most emblematic is the rise in their stated concern about the issue. Sixty-four percent of U.S. adults say they are worried a "great deal" or "fair amount" about global warming, up from 55% at this time last year and the highest reading since 2008.
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