Let's put those first two parts together?
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Originally Posted by IDtheftV
The oversupply of oil is only about 1 million bbls/day. Over time, this surplus has filled up the storage facilities and THAT is driving prices lower. Oil is not like copper or iron. You can't just produce it and store it in a field.
If the Saudis were to reduce their production from 10M bbls/day to 9M bbls/day that would "indicate" just fine.
A surplus ANYWHERE is a surplus EVERYWHERE. It's always been that way with oil. You act like this is somehow, news.
Conspiracy theorists put up wall between countries, but in the real world, the oil supply is like a pool with lots of hoses dumping oil into it and lots of hoses sucking the oil out.
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We agree. THAT is why I am positing the resulting in-rush from Russia, Iran, Iraq, Libya, and the collapsing US/Canada Unconventional Production will just wash away ANY price increase a Saudi cut-back may create.
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You DO realize that I was agreeing with you there? .... I guess not ... Well, maybe you don't think of it that way, but electricity is just another fuel. There are gasoline motors, diesel motors, NG motors and electric motors.
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True -- not that Electricity is just another fuel -- but rather I do not think of as just another fuel.
Because . . . it is not.
But I follow why you may think it is, as most folks in the US have been actively (mis)taught that Energy = Energy, and since Oil (or other liquid fuels) = Energy, and Electricity = Energy . . . therefore Oil = Electricity.
But it does not. Oil does not somehow equal Electricity or Vice Versa, Not at all.
The only two places I can find any real conversion factors are at the extremes.
1. Electricity to Oil.
A practical approach to use Electricity to make Oil. Not many exist. Only large scale I have found or worked on is where Denbury uses Electricity (entire massive electrical substations per (old) Oil Field to massively compress CO2, shoot it down hole, and foamy Oil comes blasting out of the old wells like a bottle of Coca-Cola with Mentos thrown in it. (Awesome to watch -- a 6 to 15 barrels per day "Stripper" well can blast 600 or more barrels a day).
This is aka as Tertiary Production (after Secondary, or flooding Oil fields with water to float Oil out -- which Saudi is deep into, now). Denbury uses so much Electricity to do this, that the Electricity is the single largest production site cost, and Oil has to be in $80 range to be profitable.
and,
2. Oil to Electricity.
Usually with an ICE Engine turning an Electricity Generator. While this makes Excellent Back-up Emergency and Stand-by Generation, the final costs are typically around 4 times what the Electricity is worth on the market. The only places this tends to be done on a regular basis are Islands too remote from a Main Land Grid Central Generator.
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But back to the confusion between Oil and Electricity and Energy. I had to track back for Decades to figure out how US folks have so confused Energy with Oil, and Energy with Electricity . . . . and then somehow confuse Oil with Electricity. In truth, there is barely any connection.
Dunno your age, but it stemmed from the 1970s. Wound up into the DOE-NREL guys to figure this one out.
After the US hit Peak Oil Production from Conventional Oil (Primary and Secondary Production) around 1970, things were heading downhill for US. You may recall, or may have heard of the 1973 "Embargo" from the newly forming OPEC states, and again in the late 1970s.
Rather than calling what was going on an "Oil Crisis" (because that was ALL it was), the Marketing Folks who were still Deeply in Love with Happy Motoring and the existing Stock and Manufacturing of ICEs, it served them very well to confuse Oil and Electricity as both being "Energy," and we were supposed to be experiencing an "Energy Crisis." Else we could have already made major steps away from Oil and ICEs in the past decades since the 1970s.
About the only efficient and cost effective "translation" between an ICE Fuel (N.G., in this case) and Electricity is a Combustion Turbine (like a BIG Jet Engine, which is also an ICE which burns Natural Gas), but to become profitable generally has a Steam Boiler on the Exhaust to capture the waste heat and spin a Steam Turbine. Put all that together and its called a Combined Cycle System. Nat. Gas C.C.s are presently near the Low Cost lead (under Coal and WAY under Nukes), but still more expensive than very efficient Renewables.
BUT exactly NONE of that offsets Oil Use for Transportation, unless and until -- you swap out the existing ICE from the transportation device and put in an Electric Motor as the primary drive-train source.
SUMMARY of all that -- Electricity and Electric Motors ARE SO DIFFERENT from Oil or Natural Gas burning ICEs they cannot really compare . . . other than to say comparing overall costs of build, install, and operating costs of Electric Motors are around 1/4 of ICEs -- even at these depressed Oil prices.
So. Energy DOES NOT Equal Energy. Or I suppose to paraphrase Animal Farm -- Not All Energy is Equal.
This is why Oil can go WAY UP and WAY DOWN with little to no effect on the Price or Profitability of Electricity. And Electricity can shift and makes little to no difference to Oil Prices. IF they were inter-changeable . . . that could not be so.
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Long haul and fleet vehicles aren't going to be using electricity any time soon. Even with swappable batteries, the economics of NG outweigh electricity for long hauls.
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Things are not likely as much about Batteries as you may have heard. We can do that as a separate discussion?
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Sure, electricity is a much better transportation fuel, but it's a crappy fuel to transport.
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May I challenge you on that? Next time you are driving most anywhere in North America . . . look up . . . not too far up . . . maybe just 20 to 40 feet up . . . in the air around you. There are Very Few roads in America that do not have some part of the Electrical Grid Structure along them. "Poles and Wires" is the trade term.
If you are in a more built-up or modern area of the US, the Grid may be underground, and we only see it "pop up" for surface Transformers, Distribution and Revenue Metering -- but those underground areas are generally even better served along the Roadway than the rural Poles and Wires.
The Real Deal is . . . Electricity is ALREADY transported almost everywhere most of us would care to travel in the US. Often right along the same path -- along the public access Right-of-Way / Roadway. For most of US, Electricity is closer than a Gas Station. A LOT closer.
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You can't get as much energy into a cubic foot of electrical storage as you can with the chemical storage of gas or diesel.
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Yeah. And again, you do not hear me going on about Batteries.
jmho, but Batteries are sort of a Today/Yesterday thing, but Not So Much Tomorrow. If you would like we can chat where things are heading on Batteries . . . or the Lack of . . . but that is branching WAY off Oil and Saudi. But here is a short primer >>>
Design News - Automotive News - Wireless Power Pitched as Replacement for EV Batteries
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Now now, Phil. Being condescending when we are having an intellectual argument, makes you sound insecure. Just stick to facts and you'll be fine. You're a smart guy.
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Thank you for the kind words, but even more so, Thank You for the Correction. After a program of Self-Inspection, it turns out that Arrogance is a Character Defect of mine, and so one I should guard against. So I do sincerely welcome your correction and Thank You for the observation.
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Do you mean all that coal-fired electricity?
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I have worked a fair amount of Coal. Old and New, mostly in the US. But Coal everywhere is a Dead Man Walking. China is cutting back, and India is not likely to continue. Because Renewable is becoming Just Too Cheap for Coal to compete with.
Putting in a typical New 600 to 1000 MW Coal Plant costs around $1 to 1.5 Billion Dollars. And Has MASSIVE Maintenance and Operations costs for the rest of its life-time.
You can put in that much Solar for around the same costs -- especially when close to where the Equipment is made (China) and have little to no Maintenance Costs for 25 or more years (how many more years is not yet known -- 25 years is now a common warranty, but there are panels from the 1970s still producing, and things have only become better.)
Dunno if you have followed much of the US New Generation this decade is in Renewable Electricity? Both Solar and Wind. And Coal is dying hard.
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They might have "lots" of electric vehicles on their roads in your dotage, but not in this generation or the next ( where "lots" would be 2-3% of the Chinese and Indian vehicles ).
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It is more likely trains (both in India and China) for Shipping and Transportation will continue to lead US.
Neither China nor India are yet so likely to become to addicted to personal vehicle ICEs as US.
btw, at this point, typically Jet Aircraft is supposed to be the One-True-Critical application for ICEs (usually Oil based). Have you looked at Hyper-Loop? It can be fully Renewable Electricity, as well. It looks like it will eat Commercial Jet Aircraft for breakfast . . . .
https://en.wikipedia.org/wiki/Hyperloop
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Profitability is somewhat tied to price, but not as a measure. mho, the Gross Numbers are NOT the ones to watch any longer in Any Market. Including at the National Level, or GDP. (again mho) Things are going back to 1950's and before -- Olde School -- Profitability is what matters. 
