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posted by janrinok on Monday January 16 2017, @10:16PM   Printer-friendly
from the it's-all-about-the-money dept.

An article in CleanTechnica describes how we are in a carbon bubble. Renewable energy sources are expanding quickly at reduced cost, leading to a likely mass stranding of fossil-fuel related assets as fossil fuels become more expensive than renewable sources of energy.

The current push for natural gas (and with it the related push for hydrogen fuels) is the last gasp of the fossil fuel industry. Hydrogen as a fuel source can only economically be produced from fossil fuels and hence provides no net reduction in carbon emissions, but the fossil fuel lobby are trying to convince people that it is a viable alternative to electric cars.

When the carbon bubble does burst, the impact on asset valuations is likely to be huge, with consequent impact on the larger economy.

Where do you plan to be when the carbon bubble pops?


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  • (Score: 5, Interesting) by pipedwho on Monday January 16 2017, @11:42PM

    by pipedwho (2032) on Monday January 16 2017, @11:42PM (#454608)

    It's unlikely that the fossil fuel industry, which has real value, will suddenly 'burst'. Market speculation and fractional reserves are what cause 'bubbles'. Real things take time to build and replace.

    What is likely to happen is that fossil fuels will slowly start increasing in price - the speed of which will be buffered by the large number of vehicles on the road and industries that take a while to transition as there aren't yet economical (or any) alternatives. Vehicle manufacturers will transition over to other fuel sources, as will industries that can adapt. But this takes time, and completing businesses aren't going to pop up overnight that make better and cheaper products in quantities sufficient to up-end entire industries.

    The cost of a fossil fuel vehicle will drop as it becomes more economical in the long term to buy an electric vehicle. Then after some time only premium vehicles will not be electric - as the cost of fuel isn't a huge percentage of the cost of the vehicle - followed by only older used vehicles will be on the road. Meanwhile costs of fossil fuels will go up and up until they reach a point where most oil rigs/fields start to close down leaving only a few left. Those remaining producers will want to at least stay in business partially, so can't skyrocket their costs beyond a certain level while still catering to the niche markets / industries that haven't been able to change over (eg. airlines might take a while to go electric, and plastic and fertiliser manufacturers who haven't found an economical alternative).

    The fossil fuel industry will not grow as a whole, but some small and medium sized producers may thrive as prices go up a bit to lower supply.

    Some consumer side things might go up in price as this happens, while other things get cheaper. But, it won't happen 'all of a sudden' in the way a market collapse feeds on itself in a positive feedback loop as everyone panics.

    Hopefully this transition will usher in an era of reduced carbon energy production and less local pollution, as oil, coal and natural gas usage is greatly reduced.

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  • (Score: 1) by NewNic on Tuesday January 17 2017, @12:28AM

    by NewNic (6420) on Tuesday January 17 2017, @12:28AM (#454624) Journal

    What is likely to happen is that fossil fuels will slowly start increasing in price

    Why would fossil-fuels increase in price when the issue is lower cost alternatives?

    --
    lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
    • (Score: 4, Informative) by schad on Tuesday January 17 2017, @12:47AM

      by schad (2398) on Tuesday January 17 2017, @12:47AM (#454628)

      Because you'll have to pay the same overhead to operate oil fields, rigs, tankers, etc. that you do now, but the costs will be spread over a smaller amount of product.

      The argument for a "pop" is that these increased costs will result in decreased demand, which will raise costs even more, driving down demand still further, etc. This is basically the peak oil hypothesis. A lot of people misunderstand "peak oil." It doesn't mean that we've sucked out all the oil that exists. It just means that, for whatever reason, we no longer produce as much oil as we used to. Obviously, depletion is one possible cause. But so are lower-cost alternatives, and that's the argument being made here.

      • (Score: 2) by bob_super on Tuesday January 17 2017, @12:55AM

        by bob_super (1357) on Tuesday January 17 2017, @12:55AM (#454633)

        It should be called "peak oil for the poor", because predictable rising prices cause the supply to grow when high-cost production becomes profitable (tar sands, artic oil, deepwater wells).
        There won't be a sudden lack of oil, but most stuff will get more expensive and some people will need alternatives they can afford (not 40k$ electric cars, but bikes and ramen noodles), or see their disposable income go further negative.

      • (Score: 2, Insightful) by NewNic on Tuesday January 17 2017, @01:12AM

        by NewNic (6420) on Tuesday January 17 2017, @01:12AM (#454643) Journal

        No.

        What will happen is that only the cheapest production sources will continue to operate. All the higher-cost ones will be abandoned and written-off. Thus the mix of high and low cost sources for fossil fuels will shift towards the cheaper sources.

        No one will pay for higher-cost fossil fuels unless renewable sources do not provide an alternative.

        Your claim is that reduced demand will lead to higher prices: that will only be true if fossil fuels are a niche product.

        --
        lib·er·tar·i·an·ism ˌlibərˈterēənizəm/ noun: Magical thinking that useful idiots mistake for serious political theory
  • (Score: 0, Troll) by Ethanol-fueled on Tuesday January 17 2017, @12:30AM

    by Ethanol-fueled (2792) on Tuesday January 17 2017, @12:30AM (#454625) Homepage

    Huh. Better keep my Japanese gay-looking and fuel-efficient but gas-powered-and-with-a-manual-transmission car for a few more years, I can sell it to some hipster rich kid after gasoline vehicles with manual transmissions become impossible to find. The fact that it's gay-looking will appeal to rich chicks who want a cute but gas-powered manual transmission experience.

    Then I can use the profit to upgrade from a 5-speed 4-cylinder to a 6-speed 6-cylinder.

    • (Score: 0) by Anonymous Coward on Tuesday January 17 2017, @02:42AM

      by Anonymous Coward on Tuesday January 17 2017, @02:42AM (#454686)

      Because chicks love to drive sticks.

  • (Score: 5, Informative) by c0lo on Tuesday January 17 2017, @01:06AM

    by c0lo (156) Subscriber Badge on Tuesday January 17 2017, @01:06AM (#454639) Journal

    blockquoteMeanwhile costs of fossil fuels will go up and up until they reach a point where most oil rigs/fields start to close down leaving only a few left./blockquote
    You seem to forget:
    - heavy transport (trucks, trains, boats) and aviation
    - chem industry - see that amount of plastic and composites around?
    - fertilizers

    --
    https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
  • (Score: 0) by Anonymous Coward on Tuesday January 17 2017, @07:19AM

    by Anonymous Coward on Tuesday January 17 2017, @07:19AM (#454781)

    about 50% of petroleun in US is used to make plastics (and car tires).
    natural gas is important in making plastics and fertilizers.