Guest Aeuhhh???? by David Middleton

Economics
Oil Needs to Fall Below $20 to Compete With Green Alternatives

By Mathew Carr
August 5, 2019, 4:40 AM CDT Updated on August 5, 2019, 9:18 AM CDT

Wind and solar power can produce seven times more useful energy for cars, dollar for dollar, than gasoline with oil prices near current levels, according to BNP Paribas SA.

Oil will have fall to $9-$10 a barrel in the long-term in order for gasoline cars to remain competitive with clean-powered electric vehicles, and to $17-$19 a barrel for diesel, Mark Lewis, global head of sustainability research at BNP’s asset management unit, said in a research report. U.S. benchmark crude was trading at about $55 in New York on Monday.
 
“Our analysis leads to a very stark conclusion for the oil industry: for the same capital outlay today, wind and solar energy will already produce much more useful energy for EVs than will oil purchased on the spot market,” Lewis said. “These are stunning numbers, and they suggest that the economics of renewables in tandem with EVs are set to become irresistible over the next decade.”

Lewis coined the term “energy return on capital invested” to explain the economics of road transport. It’s a measure of the money spent on oil and renewables and the differential in their net energy produced when used to provide mobility, he said.

[…]

Bloomberg

Oil Needs to Fall Below $20 to Compete With Green Alternatives…

Renewables must be so feeble, they now need two fake energy acronyms to make them viable.

First we had Energy Returned on Energy Invested (EROEI) and now we have Energy Returned on Capital Invested (EROCI)…

Stark raving mad numbers

The EROCI chart is comparing the capital costs of building offshore wind and solar PV power plants to the sales price of crude oil. It doesn’t get much more apples and oranges than this. Based on this bass-ackwards math, $9/bbl oil is worth more than $60/bbl oil. I only minored in math and spent most of the last 40 years involved in economic geology… But that is just fracking mental.

“Our analysis leads to a very stark conclusion for the oil industry: for the same capital outlay today, wind and solar energy will already produce much more useful energy for EVs than will oil purchased on the spot market.”

Mark Lewis, BNP Paribas, global head of sustainability research, BA in Spanish & German, MPhil in Latin American Studies, MA in German – LinkedIn

No business makes an investment decision based on “energy return.” Returns are denominated in $$$ or some other form of currency.

If his point is that oil would have to drop to $9/bbl for gasoline prices to be low enough to make ICE vehicles less expensive to drive than EV’s… We already have a metric for this concept: Miles per gallon equivalent (MPGe). EV’s are less expensive to drive, at least on paper… Yet the Ford F-Series pickup truck outsells all makes and models of EV’s combined in these occasionally United States… by a wide margin.

To be fair, the article does go on to acknowledge that oil has a YUGE scale factor advantage over unicorn dust… But the unicorn dust is actually a lot more expensive than indicated in Señor (or is it Herr?) Lewis’ EROCI graph.

Why is there such an incessant need for these people to make up fake metrics, fake numbers and declare an end to reality? I think this explains the problem: BNP Paribas, “The bank for a changing world.”

In the meantime, reality marches on…