Oil Industry Frets About “Dangerous” New Technology

The Oil industry would much rather you figure out a way to adapt to no food and no water, than for them to have to adapt to technological progress.

Ecowatch:

As previously reported by EcoWatch, Tesla is building its Gigafactory to not only produce enough lithium-ion batteries to change the EV market and drive down prices, the company is also planning to storm the solar energy sector. In its partnership with SolarCity, Tesla is incorporating its batteries with SolarCity’s solar system to allow customers to store the excess energy created by the panels.

Tesla’s CEO makes it no secret that he’s planning on revolutionizing the energy grid. “Our goal here is to fundamentally change the way the world uses energy,” Musk told Bloomberg. “We’re talking at the terawatt scale. The goal is complete transformation of the entire energy infrastructure of the world.”

It appears that Big Oil and Gas are bracing for the clean energy revolution. Tesla’s very own Model S landed on the cover of Alberta Oil, an oil industry glossy, with the tagline “Hell on Wheels.”

The accompanying story has a title that says it all: “Is Tesla’s Model-S the Beginning of the End for Oil?”

Below, the Oil industry magazine characterizes the Tesla Model S as “dangerous”….

Alberta Oil:

The Tesla Model-S is one of the most beautiful and interesting automobiles to ever get made. It might also be one of the most dangerous. That’s because it’s managed to do something that no other electric vehicle has ever achieved: become an object of desire. Previous generations of electric cars, from the Nissan Leaf to GM’s famous (and infamous) EV-1, have tended to be high on cost and low on drivability. But the Model-S managed to bridge that divide, and as the reviewers at Car and Driver said in their review of the car, “it dispels conventional thinking about EVs – it’s a glimpse of the future.”

That future is at the core of The Powerhouse, a new book by Quartz journalist Steve LeVine that documents the race to build a better battery. It’s a race LeVine thinks could create a global battery market worth as much as $100 billion a year by 2030, and a global electric vehicle market that’s multiples of that. Given that most of those vehicles wouldn’t need much in the way of liquid fuels, that would have an obvious impact on the demand curve for oil – and the price upstream companies get for it. Creative disruption has already wracked most major industries, and it’s wrecked more than a few of them in the process. If it’s going to visit itself upon the fossil fuel industry, it’s almost certain to take the form of an electric vehicle. As LeVine’s book makes clear, that could happen a lot sooner than some people might want to think.
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Interview excerpt with Author Steve Levine:

AO: As you point out in your book, Exxon was the one that built the first rechargeable lithium ion battery. Could ExxonMobil or any of the other supermajors in the fossil fuel industry get into the battery business or did they miss the boat?
SL: They’re monitoring this very, very closely. Generally, the big incumbent companies tend to hold back and assume that when a new technology reaches the critical stage, it can swoop in and buy up anyone. I think that’s where they are. And it’s not just ExxonMobil that feels that way. Now, I don’t think you can say they’ve missed the boat. They think they can get on the boat. And they could – but it would be very expensive. The notion has been raised (I’ve raised it too) of Google buying Tesla. Google wants to market commercial autonomous vehicles, and it’s further ahead than anyone in the pure research into a self-driving vehicle. But it’s very expensive and it’s risky to actually make a vehicle. If it bought Tesla and then installed its autonomous technology into an already very cool car, that would be a powerful combination. But people who are a lot smarter than I am in the M&A field have said that it would cost $26 billion for Google to buy Tesla. It obviously has the cash in the bank, but it’s a big pile to spend. So could ExxonMobil or Chevron buy a battery company that made this big breakthrough? Yes. The question is, given shareholder value at that point, whether they would.

AO: It’s widely accepted that demand for oil in North America is in terminal decline, and that new demand growth will come from the developing world. Given the growing concerns about pollution and climate change there, not to mention the investments that China in particular has made in battery technology itself, is that a dangerous assumption to be making?
SL: I couldn’t have said that better. The oil and gas industry does have a lot on the line if it’s wrong. But what are you going to do? They’re under threat from so many quarters at the same time. This is why one of the arguments about what Saudi Arabia is doing is that it’s trying to monetize its biggest economic asset as fast as it can. A few months ago at a conference in Dubai, Ali Al-Naimi posed a rhetorical question: What if the Black Swan out there is that in 50 years demand for oil disappears? Demand for oil isn’t going to disappear. It’s going to be with us. It’s such a convenient and powerful and dense store of energy – even if every car on the planet was an electric car, for example, using fuel in jets is much more efficient than batteries will ever be. There’s going to be liquid fuel for a long time. But the demand for it could plunge. It could really plunge.